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
Member Benefits
Oct 22, 2026
How to Build Your Fleet for Less with Member-Exclusive Ram Savings
Year-end offers on commercial trucks make this an ideal time for residential construction pros to upgrade the vehicles that keep their businesses moving. And for NAHB members, there’s even more reason to shop thanks to exclusive savings from Ram.
Housing Finance | Multifamily
Oct 21, 2026
HUD Expands Multifamily Mortgage Insurance to Built-to-Rent Developments
The Department of Housing and Urban Development (HUD) issued a mortgagee letter to announce it is revising its policy to expand access to HUD-insured Federal Housing Administration (FHA) financing for built-to-rent developments.
Latest Economic News
Economics
Oct 21, 2026
Nearly One in Three Construction Workers are Hispanic
Diversifying the construction labor force remains a key priority amid persistent skilled labor shortages. According to NAHB analysis of the 2024 American Community Survey, non-Hispanic White workers account for the majority of the construction industry at 55.8%. Hispanic workers now represent nearly one-third of the labor force at 32.8%, followed by non-Hispanic Black workers at 5% and non-Hispanic Asian workers at 1.8 %.
Economics
Oct 21, 2026
Market Share for Modular and Other Non-Site Built Housing in 2025
The total market share of non-site-built single-family homes (modular and panelized) was just 3% of single-family homes in 2025, according to NAHB analysis of completion data from the U.S. Census Bureau’s Survey of Construction (SOC).
Economics
Oct 20, 2026
Single-Family Starts Down as Affordability Challenges Persist
Single-family housing starts declined in September as builders faced higher financing, building material costs, and ongoing labor shortages.