With big money at stake, there’s been a rush in recent months by shady employee retention credit “mills” to push businesses to claim the benefit. It’s free money - but those improperly receiving the credit could have to repay it, along with interest and penalties. The employee retention credit is particularly lucrative because it’s a “refundable” tax credit, meaning that if it exceeds what a business owes in taxes, the company gets a check from the Treasury Department for the difference. Businesses must to meet certain qualifications, including hurdles governing supply-chain disruptions. Companies have until April 2024 to claim the 2020 credit, and April 2025 to claim the 2021 credit. But because the law gives businesses up to three years to amend their payroll tax returns, claims for the benefit are still rolling in as companies file an amended return. He added that the total amount of money paid out was a “fast-moving number,” implying that the agency is uncertain how much it has actually sent to businesses.Ĭompanies and nonprofits, including churches and religious organizations, had to apply for the credit by Sept. But Werfel said Thursday that the agency had received 3.6 million claims, including an additional 600,000 that have yet to be processed. Just last March, the IRS said it had paid out nearly $153 billion to more than 866,000 businesses, agency data shows. IRS Commissioner Daniel Werfel said the amount of money the agency has paid out is a "fast-moving number." The IRS said recently it had sent small businesses claiming the credit more than $153 billion.
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