Nonprofit Resources


Proposed Legislation May End Employee Retention Credit on January 31, 2024

On January 19, 2024, the House Ways and Means Committee voted to approve legislation that, if passed by Congress and signed by the President, could have significant implications for the future of the Employee Retention Credit (ERC).

Among several important provisions related to ERC promoters, enhanced penalties for incorrect ERC claims, and enlarged timeframes for IRS review, the proposed Tax Relief for American Families and Workers Act of 2024 includes a provision that would end the timeframe for claiming the ERC on January 31, 2024. Currently, eligible employers have until April 15, 2024, to claim the ERC based upon wages paid in 2020, and April 15, 2025, to claim the ERC based upon wages paid in 2021.

This proposed legislation signals a strong intention on the part of some members of Congress to take action to curtail abuse of the ERC, as well as fund other important congressional priorities. Further, the House Ways and Means Committee approved the Act by a vote of 40-3, a margin that indicates very strong bipartisan support for the proposed legislation as it moves forward out of the Committee. You can view a technical summary of the proposed legislation here.

While January 31 may not end up being the ultimate end date for the ERC, there is a strong likelihood that the ERC could end at a much earlier date than expected. We will continue to monitor this legislation and provide updates as necessary.

Interested employers who believe that they have a good faith claim for eligibility for the ERC should work with a trusted and reliable tax advisor to determine their next steps.

Please join us for our free “Employee Retention Credit Updates for 2024” webcast on Thursday, February 15 at 1 p.m. EST to learn about the latest ERC changes. You can learn more and register here. We also provide a variety of informative ERC resources, including articles, videos, and FAQs, on our website.

If you have any questions, please contact us. Our experienced nonprofit tax professionals understand the complexities of ERC claims and IRS audits, and we are here to help no matter what stage of the ERC process your organization is in.

Leave a Comment