Lawmakers have announced a tentative agreement for bipartisan tax legislation. It has not yet been voted on by the Senate or the House of Representatives. The Tax Relief for American Families and Workers Act of 2024 proposes changes to the child tax credit, the deduction for research and experimental expenditures, and bonus depreciation, among others.
The proposed legislation also bars any additional Employee Retention Credit (“ERC”) claims after January 31, 2024. The IRS has been concerned about the probability of fraud or otherwise erroneous ERC claims due to the aggressive marketing of these credits by companies; last year, the IRS placed a moratorium on the processing of new ERC claims due to the influx of what they believed to be ineligible filings. The proposed legislation would increase penalties for understating a tax liability by these “COVID-ERTC promoters.”
Any employer who still needs to file their valid ERC claim must take steps to file these as soon as possible, but no later than January 31, 2024, in anticipation of this legislation being passed. If you have any questions about Employee Retention Credit Claims, please contact your WG Advisor.