Congress reached essentially a compromise last week when the One Big Beautiful Bill Act passed and was signed into law. The prior amendment barred any ERC claims filed after January 31, 2024 but the bill which passed last week and became law would still allow ERC Employee Retention Credit claims filed before the statute of limitation expired for quarters Q1 and Q2 of 2021 but would bar any refund claims for Q3 2021 and in the case of Recovery Startup Businesses otherwise qualified for Q4 2021, the Act would also bar those claims.
The OBBB Act also requires ERC promoters to comply with due diligence requirements and states a penalty of $1,000 for failing to comply, including excessive refund claims.
There are still constitutional concerns and potentially challenges to barring Q3 and Q4 2021 claims legitimately filed and those challenges may work their way through the courts.