Quantcast

North Charlotte Today

Saturday, November 2, 2024

Bipartisan bill introduced to repeal COVID-era employee retention tax credit

Webp 7i4n67y3tp9vevvvwuhkckradyzw

Senator Thom Tillis | Senator Thom Tillis Official photo

Senator Thom Tillis | Senator Thom Tillis Official photo

Senator Thom Tillis, alongside Senators Mitt Romney (R-UT) and Joe Manchin (I-WV), recently introduced the Employee Retention Tax Credit Repeal Act. This bipartisan legislation aims to disallow the processing of Employee Retention Tax Credit (ERTC) claims filed after January 31, 2024, and increase penalties for fraud.

“Repealing the ERTC is a critical step towards addressing America’s debt crisis,” said Senator Tillis. “It’s past time to eliminate this fraud-ridden pandemic-era policy so we can concentrate on getting our fiscal house in order.”

The Employee Retention Tax Credit (ERTC) was created by the CARES Act and further expanded by the Consolidated Appropriations Act of 2021 and the American Rescue Plan. It is a refundable credit available to qualifying businesses that paid wages to employees during the COVID-19 pandemic.

In October 2021, the IRS issued a notice warning employers of “third parties promoting improper Employee Retention claims.” These promoters often use aggressive and deceptive marketing tactics to convince businesses to allow them to file ERTC claims on their behalf. According to the Financial Crimes Enforcement Network (FinCEN), “promoters typically charge a large upfront fee, sometimes upwards of 30-40% of the expected credit amount” as payment for their services. The program has seen a high volume of fraudulent claims.

Estimates suggest that the credit has added $230 billion to the deficit through Fiscal Year 2023 and could eventually cost up to $550 billion. Further, in June 2024, the IRS announced that between 10% and 20% of claims showed “clear signs of being erroneous” while another 60% to 70% showed an “unacceptable risk” of being improper. Unless Congress acts, applications for the credit are available until April 15, 2025.

Full text of the bill can be found HERE.

###

ORGANIZATIONS IN THIS STORY

!RECEIVE ALERTS

The next time we write about any of these orgs, we’ll email you a link to the story. You may edit your settings or unsubscribe at any time.
Sign-up

DONATE

Help support the Metric Media Foundation's mission to restore community based news.
Donate