IRS Halts Employee Retention Credit (ERTC) Program

The IRS announced Thursday that it will stop processing any new ERTC claims, putting a halt to the very popular tax relief program that was designed to help companies that were financially impacted by the COVID pandemic restrictions but still maintained their workforce.

The program began in March of 2020, and since then, over 3.6 million claims have been filed by businesses. Even though this tax credit was specifically to help businesses in the last 3 quarters of 2020 and the first 3 quarters of 2021, the applications have recently accelerated, partially due to aggressive marketing by companies that took advantage of the program. Many of these firms that did not exist before 2020, charged 10% - 25% of the business's potential refund.

From our experience, many of these companies did not follow the eligibility rules and urged their clients to file for quarters they may not have been eligible for.

The IRS is now commencing with criminal investigations for suspected fraud, and civil audits to ensure the eligibility of businesses that filed for ERTC

Even though they have halted the program, any applications that have been submitted will be processed, although the lead time will be much longer due to extra scrutiny by the IRS.

It is advised that businesses that received a refund, keep your records in order as to how you determined eligibility and how your ERTC refund was calculated. If Infinium helped you with your refund, we have the calculations available, just be sure you are able to document your reasons for filing your credit.

There will be more info forthcoming, Infinium will do our best to update you as news becomes available.