IRS Issues Warning on Employee Retention Credit
The Internal Revenue Service (IRS) has issued several warnings citing concerns that third-party promoters are pushing ineligible taxpayers to claim the Employee Retention Credit (ERC). The IRS is urging businesses to carefully review the ERC guidelines before claiming the credit. In the most recent warning, the agency noted “the IRS is actively auditing and conducting criminal investigations related to these false claims. People need to think twice before claiming this."
The ERC was a short-lived tax credit to support businesses that retained their workforce during the COVID-19 pandemic. To qualify for the ERC, employers must have had operations fully or partially shut down on order of an appropriate governmental entity or must have experienced a significant decline in gross receipts. The credit existed for part of 2020 and 2021.
The IRS has now issued several warnings to employers to be wary of third parties who are advising them to claim the ERC when they may not qualify. Some third parties are taking improper positions related to taxpayer eligibility for and computation of the credit.
NAHB is providing this information for general information only. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers.
The ERC was a short-lived tax credit to support businesses that retained their workforce during the COVID-19 pandemic. To qualify for the ERC, employers must have had operations fully or partially shut down on order of an appropriate governmental entity or must have experienced a significant decline in gross receipts. The credit existed for part of 2020 and 2021.
The IRS has now issued several warnings to employers to be wary of third parties who are advising them to claim the ERC when they may not qualify. Some third parties are taking improper positions related to taxpayer eligibility for and computation of the credit.
NAHB is providing this information for general information only. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers.
Latest from NAHBNow
Legal
Oct 15, 2026
Supreme Court Leaves New York City’s SoHo/NoHo Arts Fee in Place
The U.S. Supreme Court declined to hear a challenge to a New York City law that requires certain property owners to pay a substantial fee to convert their properties to unrestricted residential use. NAHB filed a brief urging the Supreme Court to review the case.
Advocacy | BUILD-PAC
Oct 15, 2026
Midterm Elections: 3 Ways Members Can Make a Difference on Nov. 3
Elected officials at all levels play a role in finding solutions to make housing more affordable. Here’s how NAHB members can make a difference this election cycle.
Latest Economic News
Economics
Oct 14, 2026
Labor Shortages a Growing Problem
Labor shortages in the home building industry are becoming more widespread, according to recent results from the NAHB/Well Fargo Housing Market Index (HMI) survey.
Economics
Oct 14, 2026
Inflation Accelerated in September
Higher energy prices pushed inflation to a four-month high in September, keeping pressure on the Fed as inflation has remained above its 2% target for more than five years.
Economics
Oct 13, 2026
Existing Home Sales Increased in September
Existing home sales rose after three months of declines as improved inventory gave buyers more negotiating power. As buyers wait for rate relief, homes are sitting on the market longer and for-sale inventory reached the highest level in over a decade.