“The ERC (employee retention credit) was created by the Coronavirus Aid, Relief, and Economic Security Act to help struggling businesses pay their employees during the COVID-19 pandemic by establishing a refundable tax credit against employer taxes.”
But ERC has been rife with abuse and fraud, and more expensive than first estimated, from $55 billion to $230 billion, Tax Notes explained. And it’s retroactive.
As Good Jobs First Executive Director Greg LeRoy told Tax Notes: “If companies are getting paid to do something they did three years ago, that’s exactly the opposite of the definition of an incentive. Now you’ve got somebody out there teaching companies how to claim it retroactively and taking 25 percent of that. That’s not economic development.”
Read the full story at Tax Notes.