IRS Seeks to Claw Back Covid-Era Paid Leave Credit Overpayments

The IRS proposed a rule that would recoup interest paid to employers on paid leave and employee retention tax credits wrongly claimed under three separate COVID-19 aid laws.

The programs specified in Monday’s proposal have been the target of fraudsters, and employee retention credits have been on hold for claims dating back to September 2023.

The Families First Coronavirus Response Act of 2020 and the American Rescue Plan Act of 2021 expanded paid sick and family leave credits between April 1, 2020, and Sept. 30, 2021.

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, the Consolidated Appropriations ...