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Potential Deadline Shift for ERC Filing: Implications Explained

by | Jan 26, 2024 | Business Law

The House Ways and Means Committee Advances a Crucial Bill

In a significant development, the House Ways and Means Committee recently passed the Tax Relief for American Families and Workers Act of 2024, which proposes a new deadline of January 31, 2024, for businesses to file Employee Retention Credit (ERC) claims. The new deadline is a notable shift from the current deadlines of April 15, 2024, for the 2020 tax year and April 15, 2025, for the 2021 tax year.

A Closer Look at the ERC

Initiated as a response to the COVID-19 pandemic, the ERC is a refundable tax credit for businesses that continued paying employees during the pandemic shutdowns or experienced significant declines in gross receipts in 2020 or 2021. While the ERC’s goal of supporting businesses and preserving employment is commendable, it has unfortunately been marred by widespread fraud, prompting the IRS to intensify its efforts to address these issues.

Details of the Tax Relief for American Families and Workers Act of 2024

The bill, which may be voted on by the full House of Representatives as early as January 29, is still subject to modifications. Its passage through the Senate and subsequent presidential approval are necessary for it to become law. The $79 billion package includes not only individual and business tax breaks but also provisions to sunset the ERC early. It aims to bolster the child tax credit and relax rules around business-related expenses.

Significantly, the bill proposes increased penalties for ERC promotors involved in fraud and grants the IRS tools to address already filed improper claims.

What Businesses Need to Do

Given the potential changes, businesses should act swiftly to file their ERC claims by January 31, 2024. It is crucial for businesses to thoroughly assess their eligibility for the ERC, ideally with the guidance of a trusted tax professional. For those who have already filed but are uncertain about their eligibility, consulting legal counsel is advisable, especially before any IRS contact.

Businesses that engage tax credit promoters for their ERC claims should reassess their eligibility with a tax professional. They should also consider the ERC withdrawal program and the Voluntary Disclosure Program, which offer a limited-time opportunity to resolve ERC issues under favorable terms. However, time is of the essence as these programs are not permanent.


The proposed changes to the ERC filing deadline represent a significant shift in the landscape of pandemic-related tax credits. Businesses must stay informed and proactive in their approach to ensure compliance and optimize their tax positions in these evolving circumstances.

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