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Jorge Castro Comments on Difficulty for Employment Tax Credit in Omnibus Package in Roll Call

"Uphill Climb Seen for Employment Tax Credit in Omnibus Talks"

Roll Call

Jorge Castro, former Counselor to the IRS Commissioner during the Obama Administration and Democratic Congressional tax aide, commented on the possibility of including the repealed employee retention tax credit in the 2022 omnibus package. A pandemic relief measure with sustained bipartisan backing, the employee retention tax credit was originally set to expire at the end of 2021. However, it was cut off for the last quarter of 2021 by Senators looking for revenue to offset the bipartisan infrastructure law (which was enacted last fall), for an estimated $8.2 billion revenue gain for the U.S. Treasury Department. Commenting on enacting a retroactive change to the tax credit, Castro said the unusually difficult tax season adds complexity to the issue. It would likely lead to more paper tax filings, Castro noted, which require manual processing – a large reason for the IRS's current backlog.