The Employee Retention Credit (ERC) was established by Congress to compensate dental practices (and other businesses) for their economic loss suffered by continuing to pay employees during the COVID-19 pandemic. The credit was available to those practices who had a significant decline in gross receipts, or who suffered significant economic injury because their operations were either fully or partially suspended due to a government order during 2020 or the first nine months of 2021.

The IRS estimates that 95% of the ERC claims made since the end of 2021 (by filing amended payroll tax returns) are suspect or fraudulent. As a result, they announced a moratorium on processing new ERC claims in September 2023, which remains in effect. Currently, the IRS has 1.13 million ERC claims which haven’t been processed yet. That’s in addition to the 3.6 million claims previously processed with payments totaling over $230 billion, or more than four times the original estimated $55 billion program cost.