Employee Retention Credit (ERC) solutions

The One Big Beautiful Bill Act (OBBBA) (P.L. 119-21) made significant changes to the Employee Retention Credit (ERC) for the third and fourth quarters of 2021, as well as creating enhanced penalties for ERC promoters. Consistent with a bill that passed the House of Representatives at the end of 2024, the OBBBA retroactively ends employers' ability to file new ERC claims after Jan. 31, 2024. The IRS published frequently asked questions on IRS.gov in October 2025 stating that the earlier end date only applies to the third and fourth quarters of 2021, and that any ERC amounts paid by the IRS with regard to an ERC claim filed after Jan. 31, 2024, and paid prior to July 4, 2025, would not generally be subject to a clawback. Given that ERC claims for the fourth quarter were limited to startup recovery businesses, the impact of the ERC limitations are generally limited to third quarter 2021 claims filed after Jan. 31, 2024.