The Employee Retention Credit (the “ERC”) was implemented in response to the pandemic proved an essential lifeline of support to employers, enabling them to retain their workforce and continue paying wages and, in many instances, health care benefits. The ERC has been an effective and critical measure for America’s economic recovery and filers deserve to have their claims reviewed under the program.
Congress established the bipartisan Employee Retention Credit (the “ERC”) to safeguard businesses, enabling them to keep employees on payroll amidst unprecedented economic disruption.
During the COVID-19 pandemic, 45% of small businesses experienced a 50% reduction in revenue. Although the economy continues to recover, many businesses continue to face challenges brought on by the pandemic. The ERC has played a crucial role in averting potential business closures and workforce reductions, enabling businesses to sustain operations and retain their valuable employees.
The Internal Revenue Service (the “IRS”) moratorium has contributed to a backlog of over one million claims. Employers with legitimate claims are experiencing prolonged wait times for their claims to be reviewed and processed, adding to the uncertainty they face keeping their doors open and lights on.
Since the creation of the ERC program in 2020, the IRS has continued to put out confusing and contradictory guidance further complicating employers’ ability to assess eligibility.
In September 2023, the IRS enforced a moratorium on processing newly filed ERC claims, creating more financial uncertainty for businesses and families across the country.
Congress must act to ensure the IRS expeditiously processes the over one million outstanding ERC claims. Your advocacy is crucial to urging your congressional representatives to continue supporting employers and workers by demanding the IRS do its job!
The Coalition to Preserve American Jobs (CPAJ) is comprised of employers across industries who are the engine of the U.S. economy, along with those within the tax credit community. Tax credits like the ERC provide crucial tools to eligible employers as they continue to face instability and uncertainty in today’s economy. Our shared goal is to safeguard employment-based tax credits for future unforeseen natural disasters and any future instances of emergent economic uncertainty.
