At A Glance
- The IRS announced a moratorium on new claims submitted for the Employee Retention Credit (ERC).
- The effective date for the moratorium is September 14, 2023, and while no end date has been set, the IRS expects the moratorium to last through December 31, 2023, at a minimum.
- The IRS also stated the existing queue of claims will continue to be processed, albeit at a slower pace due to fraud concerns.
Pause on New ERC Claims
New ERC Claims Paused
Internal Revenue Services (IRS) Commissioner Danny Werfel ordered an immediate pause on processing new ERC claims, beginning September 14, 2023, to run through at least December 31, 2023, due to concerns about fraudulent claims.
The IRS put this moratorium in place over growing concerns about fraudulent marketing schemes targeting employers and putting them at increased financial risk. The IRS is encouraging employers to seek out trusted tax professionals who understand the complex ERC rules. Additionally, employers should consider consulting IRS resources and tools to assist in assessing their ERC eligibility, including their frequently asked questions.
The IRS also has released a new ERC eligibility checklist to help employers determine if they are eligible for the credit.
The full IRS ERC Pause Announcement is posted to IRS.gov
Existing ERC Claims
The IRS has announced their heightened scrutiny of claims submitted before September 14, 2023. They anticipate that the processing time for ERC claims, which typically took 90 days, will now extend to a period of 180 days.
New ERC Claims
Paylocity will continue to submit ERC claims on behalf of our clients. The IRS will receive but not process new ERC claims until they lift the moratorium.
ERC Claim Submission Deadline
Businesses can file ERC claims for 2020 and 2021. For all eligible quarters of 2020, the deadline to file for the ERC is April 15, 2024. For all eligible quarters of 2021, the deadline is April 15, 2025. Claims will not be rejected as late if they are filed by the deadline, regardless of whether the IRS reviews them after the filing deadline.
Please review the list of Frequently Asked Questions below, prepared by Paylocity on the ERC moratorium. Paylocity is closely monitoring this situation, and we will share additional information as it becomes available from the IRS.
Frequently Asked Questions