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Back when the Washington folks were trying to cure Covid by throwing slush funds at it, one of the tactics was the employee retention tax credit. There was comment at the time that many of these programs amounted to unending slush funds. This one certainly has been – what was supposed to cost $ billion has cost five times that much.<\/p>\n
Demand for the credit soared as Congress extended the tax break and made it available to more companies. Aggressive marketers dangled the prospect of enormous refunds to business owners if they would just apply. As a result, what was expected to cost the federal government $55 billion has instead ballooned to nearly five times that amount as of July. Meanwhile, new claims are still pouring into the IRS each week, ensuring a growing price tag that lawmakers are anxious to cap.<\/p>\n
When Congress created the tax break for employers at the pandemic\u2019s onset, it proved so popular that lawmakers extended and amended the program three times. The credit, worth up to $26,000 per employee, can be claimed on wages paid through 2021.<\/p>\n
To qualify, generally businesses must show that a local or state government order related to the COVID-19 pandemic resulted in their business having to close or partially suspend operations. Or the businesses must show they experienced a significant decline in revenues.<\/p>\n
For instance, a New Jersey tax preparer was arrested in July on charges related to fraudulently seeking over $124 million from the IRS when he filed more than 1,000 tax returns claiming the employment tax credits.<\/p><\/blockquote>\n