Tillis is proposing a bipartisan bill to repeal the “fraudulent” ERTC

A refundable credit called the Employee Retention Tax Credit (ERTC), available to qualified businesses that have paid wages to their employees during the COVID-19 pandemic, would be introduced under a bipartisan bill passed Sept. 18 by U.S. Sen. Thom Tillis ( R-NC) are being phased out).

The ERTC Repeal Act of 2024, S. 5079, would prohibit the processing of ERTC claims filed after January 31, 2024 and increase penalties for fraud, according to a bill summary provided by Senator Tillis' staff.

“Repealing the ERTC is a critical step in addressing America’s debt crisis,” said Senator Tillis, an original co-signer of S. 5079. “It is past time to repeal these fraudulent pandemic-era policies so we can “We can focus on managing our finances.” House in order.”

In October 2021, the IRS issued a notice warning employers about “third parties promoting inappropriate employee retention claims” who often use aggressive and misleading marketing tactics to persuade companies to allow them to collect ERTC on their behalf. To file claims, the summary cited information from the Financial Crimes Enforcement Network (FinCEN), which states that “facilitators typically charge a large upfront fee, sometimes more than 30-40 percent of the expected loan amount,” as payment for their services .

Estimates suggest the ERTC has added $230 billion to the deficit by fiscal year 2023 and could cost as much as $550 billion, the summary said. Additionally, the IRS announced in June that between 10 and 20 percent of claims had “clear signs of error.” while another 60-70 percent had an “unacceptable risk” of inappropriateness.

Unless Congress decides, applications for the credit are possible until April 15, 2025.

S. 5079, sponsored and co-sponsored by U.S. Senators Mitt Romney (R-UT) and Joe Manchin (I-WV), respectively, has been referred to the U.S. Senate Finance Committee for consideration.