January 29, 2024

Urgent Deadline Alert: ERTC Claim Window to Close Sooner Under New Tax Bill

Congress may set January 31, 2024, as the final date to submit Employee Retention Tax Credit claims

By Michael D’Addio, Principal, Tax & Business Services

Urgent Deadline Alert: ERTC Claim Window to Close Sooner Under New Tax Bill Employee Retention Tax Credit

The House of Representatives’ Ways & Means Committee approved the “Tax Relief for American Families and Workers Act of 2024” in a decisive 40-3 vote. This bill is the product of an agreement between Senate Finance Committee Chairman Ron Wyden and House Ways and Means Committee Chairman Jason Smith.

Central to the bill’s financing is a bolstered enforcement mechanism targeting the Employee Retention Tax Credit (ERTC). This includes increased penalties on COVID-ERTC Promoters and the extension of the statute of limitations for the IRS to review refund claims to six years.

Notably, the proposed legislation also sets a firm deadline of January 31, 2024, for submitting ERTC refund claims. Currently, ERTC claims can be made for the 2020 quarters by April 15, 2024, and for the 2021 quarters by April 15, 2025. This new provision would significantly shorten the time a claim must be made.

The proposed legislation may be brought to a vote in the House in the next two weeks and, if passed, must go to the Senate for a vote. What if the bill is not enacted until after the January 31, 2024 date? Could it be extended? While a later date could be selected, informal discussions indicate that the January 31st date will be used in the final bill even if the law is passed and signed into law at a later date.

Those with unfiled ERTC claims should heed this accelerated deadline.

If you have any questions concerning how this provision might impact you, do not hesitate to contact your Marcum professional.