IRS Puts Temporary Halt on Employee Retention Credit Program: What Small Businesses Need to Know Before It’s Too Late


Yes, it’s true that On September 20th, the Internal Revenue Service (IRS) announced a temporary moratorium on its Employee Retention Credit program. The program was established to provide businesses with tax credits for retaining employees during the COVID-19 pandemic. Since its inception in March 2020, tens of thousands of businesses have taken advantage of the credit and received billions in savings from it.

The IRS has now decided to suspend new applications for this program until at least the end of 2023 due to a large number of recent claims that the agency is concerned are ineligible. However, if you truly are eligible and meet the CARES Act criteria then you should not hesitate to submit a claim. After all this program was meant to help small businesses that were affected by the government shutdown during the pandemic.

You can still submit ERC claims

As the IRS will not be reviewing any new claims, businesses can still submit them. Actually, we would actually recommend that if you have been procrastinating and have not yet looked into whether you qualify for ERC funding then you should do it soon. As of April 2024, you will no longer be able to submit claims for the year 2020 and 2021 will be the only year that will still be eligible. Therefore, if you meet the qualifications, you could be leaving money on the table that truly is meant for you.

ERC Funding Qualifiers

Here are the qualifying factors for ERC funding:

  1. Businesses that were open as of Feb 2020

A significant decline in gross receipts (the “Gross Receipts Test”) in comparable quarters the prior year


Full or partial suspension of business operations due to government orders enacted in response to the COVID-19 pandemic (the “Government Orders Test”)

  • 2. If you started a business after Feb 2020 up to late 2021 and had employees other than yourself or family members, then you are eligible under the Recovery Start-Up criteria.

Those two ways above are the only ways.

When the IRS moratorium is lifted, it will take longer to receive the ERC funding as they will be reviewing the claims much more carefully. Thus, it is important that you work with a company that has done thousands of these with an excellent reputation, and has the tax experts on staff in order for them to help you submit your claim.

Submit Your ERC Claims

If you qualify, employers can receive up to $5,000 per employee for 2020 and up to $7,000 per quarter for three quarters of 2021.

So, if you have not applied yet for ERC funding and meet the criteria it is worth checking with an ERC Specialist to find out more before it is too late. The IRS moratorium will not last forever and you should get in line as there will surely be a backlog when it is lifted. Depending on the number of employees you have, you can choose from two of the top ERC companies in the country. Now is a great time.

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