Anthem’s 2026 Reimbursement Changes: What Providers Need to Know

Anthem’s reimbursement policy changes, effective April 1, 2026, will directly impact how providers are paid for preventive services, same-day sick visits, and screening-related care.

If your organization relies on preventive care visits as a consistent revenue stream, these updates aren’t just technical; they’re operational.

Here’s a clear breakdown of what’s changing and what you should be doing now.

Key Takeaway: Same-Day Visits Will Be Paid Differently

One of the most significant updates affects same-day preventive and sick visits under Medicare Advantage plans.

  • Preventive visit: 100% reimbursement
  • Sick visit (same day): 50% reimbursement

To receive reimbursement for the sick visit, Modifier 25 is required, and diagnosis codes must support both services. This also applies to preventive and wellness visit combinations.

Important exception: Federally Qualified Health Centers (FQHCs) and Rural Health Centers (RHCs) are excluded from this rule.

Preventive Visits Now Include More Services (Bundled Reimbursement)

For commercial plans, Anthem is expanding what is considered part of a preventive visit — meaning fewer services will be reimbursed separately.

Services now bundled into preventive care include:

  • Counseling services
  • Medical nutrition therapy
  • Screening services
  • Additional other Evaluation & Management (E/M) services
  • Annual gynecological exams
  • Prolonged services
  • Vision screenings

These services are not eligible for separate reimbursement when performed on the same day as a preventive visit.

Does Modifier 25 Still Work? Yes and No

Modifier 25 is often used to indicate a separate, significant E/M service, but its impact is changing.

Yes, it is still required to report a same-day sick visit. No, it will not override bundling rules for services included in preventive care.

Modifier 25 is still necessary, but no longer sufficient to guarantee payment.

What Providers Should Be Doing Now

With these changes now in effect, the focus shifts from preparation to active monitoring and adjustment.

1. Review Recent Claims Activity

Look at claims from April 1 forward:

  • Are same-day visits reimbursing as expected?
  • Are you seeing reductions or denials tied to these policies?

2. Identify Revenue Impact

Take a closer look at how these changes are affecting your bottom line. For example:

  • How often are preventive and sick visits happening on the same day?
  • Are services you previously billed separately now being bundled?
  • Are you receiving less reimbursement for common visit types?

Even a quick review can help you spot trends early.

3. Reinforce Documentation and Coding Practices

Ensure providers and coding teams are aligned on:

  • When Modifier 25 is required
  • When services are no longer separately reimbursable
  • Proper diagnosis coding to support distinct services

4. Adjust Scheduling and Workflow as Needed

If certain visit combinations consistently reduce reimbursement:

  • Reevaluate how appointments are structured
  • Consider whether separating services (when appropriate) makes sense operationally

5. Monitor Denials and Payer Feedback

Track denial trends closely:

  • Are they tied to bundling rules?
  • Are modifiers being rejected?

Use this data to refine processes quickly.

The Bigger Picture: A Shift Toward Bundled Care

These updates are part of a larger trend: payers are redefining what qualifies as a “separate” service.

For providers, that means less reliance on modifiers alone, greater emphasis on documentation, intent, and visit structure, and more coordination across teams.

Final Thoughts

Anthem’s 2026 reimbursement changes aren’t just about coding. They affect how care is scheduled, documented, and reimbursed.

Organizations that proactively adjust workflows and educate their teams will be better positioned to protect revenue, reduce denials, and stay compliant.

If you’re unsure how these updates will impact your practice, now is the time to evaluate your current processes and make adjustments before they take effect. If you have questions about how these updates apply to your organization, our team is here to help you evaluate your processes and identify potential revenue impacts.


2026 Medicare Fee Schedule Updates: Good News for Office-Based Providers, Not So Much for Facility Settings

The 2026 Medicare Physician Fee Schedule (MPFS) updates are sending mixed signals depending on where services are performed.

If your providers primarily see patients in the office, this update likely brings positive news. If a large portion of services are performed in a facility setting (hospital, facility outpatient department, etc.), reimbursement pressure may be increasing.

The Centers for Medicare & Medicaid Services (CMS) released the 2026 Medicare payment updates with adjustments that directly impact physician reimbursement across care settings.

Let’s break it down using some Evaluation & Management services as examples.

Office (Non-Facility) Services: Rates Increased

Across commonly billed office E/M codes, Medicare increased reimbursement for services performed in a non-facility setting.

For example (Indiana rates):

  • Code 99213
    • 2025: $83.88
    • 2026: $90.09
    • Increase: +$6.21
  • Code 99214
    • 2025: $118.14
    • 2026: $128.33
    • Increase: +$10.19
  • Code 99215
    • 2025: $166.04
    • 2026: $182.08
    • Increase: +$16.04

These increases represent meaningful revenue gains for practices with high office-based visit volume. Multiplied across hundreds or thousands of visits annually, the impact becomes significant.

For independent practices and provider-owned clinics, this shift helps offset rising operational costs — staffing, rent, technology, and compliance pressures.

Facility Services: Rates Decreased

On the flip side, reimbursement for E/M services performed in a facility setting decreased (excluding anesthesia services).

Using code 99213 again as an example (Indiana rates):

  • Code 99213 – Facility
    • 2025: $60.62
    • 2026: $55.10
    • Decrease: -$5.52

Similarly:

  • Code 99214 – Facility
    • 2025: $89.21
    • 2026: $80.95
    • Decrease: -$8.26
  • Code 99215 – Facility
    • 2025: $132.04
    • 2026: $120.15
    • Decrease: -$11.89

While these reductions may appear modest at first glance, the cumulative effect across hospital-based or facility-heavy provider groups can be substantial.

Why This Matters More Than Ever

The 2026 update reinforces a trend we’ve seen before: site of service matters… a lot.

Two providers performing the same CPT code may now see a widening reimbursement gap based solely on where the service occurs.

That affects:

  • Independent practices
  • Hospital-employed physicians
  • Specialty providers splitting time between clinic and facility
  • Groups evaluating expansion or restructuring

This isn’t just a Medicare billing detail. It’s a strategic financial variable.

Strategic Considerations for Practices

With these changes in place, now is the time to:

1. Analyze Your Site-of-Service Mix

What percentage of your services are billed as facility vs. non-facility? Even a small shift in volume could materially affect revenue projections. Are you performing services in the facility that could be performed in your office?

2. Review Employment & Compensation Models

If providers split time between hospital and clinic, compensation formulas tied to collections may shift unexpectedly.

3. Revisit Revenue Forecasting

Budget projections built on 2025 rates need to be updated. For some practices, 2026 could bring improved margins. For others, it may require expense adjustments.

4. Confirm Accurate POS Coding

With rate differences increasing, correct Place of Service (POS) coding is even more critical. Errors could now result in larger reimbursement discrepancies.

The Bottom Line

For office-based providers, 2026 Medicare updates bring welcome increases.

For providers performing services in a facility setting, reimbursement tightening continues.

The services haven’t changed, but where they’re performed now carries even more financial weight. If you have questions about how these updates affect your specific billing situation, contact your HSC Medical Billing representative or give our team a call at 812.473.0181. We’re here to help you navigate the changes with clarity and confidence.

Find the full 2026 Medicare E/M rate changes for Indiana and Kentucky here:

A Message from HSC’s New CEO

Brant Kennedy, CPA, Manufacturing Team Lead

One month into the CEO role at HSC, what stands out to me most is what has long defined this firm: our people. People who show up every day with a genuine commitment to our clients and to each other.

This past year was especially meaningful as we marked 50 years of HSC. It gave us the opportunity to reflect on the relationships and trust that continue to shape how we serve our clients and support one another.

I’m incredibly proud of our recent promotions and the continued growth we’re seeing across the firm. These advancements reflect the talent of our people and our long-standing commitment to developing leaders from within.

We’re also making thoughtful investments in technology that support how our team works and collaborates. These tools help us operate more efficiently while keeping personal relationships and high-quality service at the center of everything we do.

As we look ahead, we remain committed to operating as an independent firm. That independence allows us to make long-term decisions with our clients and our people in mind, while staying true to the values that have guided HSC for five decades.

I’m grateful to be part of a team that cares deeply about our clients, our people, and the firm — and I’m confident in what lies ahead.

Brant Kennedy, CPA

CEO

Meals and Entertainment Quick Reference Guide

Understanding the tax treatment of business meals, entertainment, and related expenses continues to be a challenge for many business owners. Deductibility rules have shifted over time, temporary provisions have expired, and additional changes are scheduled to take effect beginning in 2026. As a result, expenses that were once fully deductible, or partially deductible, may now be limited or disallowed altogether.

The IRS rules governing business meal deductions, entertainment expenses, employee meals, and business gifts are highly specific and documentation-driven. Misclassifying these expenses can lead to missed deductions, compliance issues, or unwanted scrutiny during an audit. This is especially important for businesses that frequently incur client meals, employee travel expenses, or host employee events.

To help businesses navigate these rules with confidence, we’ve created a Meal and Entertainment Quick Reference Guide. This resource outlines the current deductibility rules and highlights upcoming changes so business owners and financial decision-makers can plan ahead and avoid surprises at tax time.

Have additional questions? Contact our tax experts to learn more.

Tax laws and guidance continue to evolve. To stay informed about changes that may affect your business, follow us on LinkedIn and Facebook or sign up to receive our newsletter, where we regularly share timely tax updates and insights.

Honored to Receive Gold in the Community Choice Awards

We’re honored to share that our Payroll Department has been awarded Gold in this year’s Evansville Community Choice Awards!

Our payroll professionals work hard behind the scenes to support the businesses that keep our region moving. From accuracy and compliance to service and responsiveness, they take pride in doing the kind of work most people only notice when something goes wrong. So earning recognition from the community means the world to us.

To everyone who voted, THANK YOU. Your confidence inspires us to continue raising the bar and delivering payroll services that make your operations smoother and your lives easier.

We’re grateful, we’re energized, and we’re ready for another year of serving our community.

Harding Shymanski ranks on Inside Public Accounting’s Top 200 List

Inside Public Accounting Top 200 Firms 2025

We’re honored to be recognized on Inside Public Accounting’s Top 200 Firms list again this year!

This achievement reflects the dedication of our incredible team and the trust our clients place in us every day. We’re proud to be making an impact in the industries we serve.

One Big Beautiful Bill

There’s been plenty of discussion about the One Big Beautiful Bill (OBBB) and what it could mean for individuals and businesses. To help you navigate the details, we’ve created a dedicated page with a straightforward overview of the bill’s key points, proposed changes, and potential impacts.

👉 Visit our OBBB resource page to learn more

One Big Beautiful Summary of the One Big Beautiful Bill Act

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law. This expansive legislation makes permanent many of the tax provisions from the 2017 Tax Cuts and Jobs Act (TCJA) that were set to expire at the end of 2025, as well as increasing or creating new deductions in many areas. Both business and individual tax provisions are impacted by the new legislation.

OBBBA contains a multitude of narrow or industry-specific items. Additionally, due to the broad nature of the Act, the Treasury Department, IRS, and other agencies will spend the next year or more issuing regulations, forms, and notices that fill in the operational details of these new provisions. The following is a high-level summary of the changes most relevant to our clients and is not an exhaustive report.

Business Tax Provisions  

Bonus Depreciation – 100% expensing of qualifying property under §168(k) has been a tax tool popular on both sides of the aisle for many years as a way to encourage business investment in equipment and other necessary long-lived assets. The TCJA originally extended 100% bonus depreciation, but for tax years 2023 and 2024, this additional deduction was reduced to 80% and 60%, respectively. OBBBA now makes 100% bonus depreciation permanent for qualifying property for assets purchased after January 19, 2025.  

For manufacturers and other producers, a new provision under §168(n) allows 100% depreciation for “Qualified Production Property” (QPP), defined as nonresidential real property that is used as an integral part of a qualified production activity. QPP must be constructed between January 20, 2025, and December 31, 2028, and placed in service by December 31, 2030. Additionally, existing property not used in a qualified production activity between January 1, 2021, and May 12, 2025, will also qualify if acquired after January 19, 2025, and before January 1, 2029. This new provision will significantly accelerate the available depreciation on property otherwise commonly subject to a 39-year depreciable life.  

Higher Ceiling for §179 Expensing – As a companion to bonus depreciation, §179 also allows businesses to deduct the cost of most tangible equipment (and certain building improvements) instead of depreciating it over time. OBBBA raises the annual dollar cap to $2.5 million and begins phasing the benefit out when total qualifying purchases top $4 million in a year. Both thresholds will adjust for inflation going forward.  

Research Expenditure Expensing Under §174 – OBBBA restores the current year deductibility of §174 expenditures relating to research activities. Due to a change included in the TCJA, beginning with the 2022 tax year, businesses were required to capitalize and amortize research expenditures over five years (domestic) or fifteen years (foreign-sourced). This required capitalization has been a sore spot for many companies due to the decrease in available tax deductions despite incurring the economic outlay for these expenditures. With the OBBBA, Congress has finally passed a fix for this issue, along with the ability for small taxpayers (less than $31 million in gross receipts) to retroactively claim deductions for the previously capitalized expenditures. Other taxpayers may choose to accelerate their remaining unamortized research expenditures over one or two years beginning with their 2025 tax year.  

§163(j) Business Interest Deduction – Another key provision from the TCJA was the limitation under §163(j) for deducting business interest expense. This provision specifically applied to larger taxpayers who failed to meet the gross receipts test for small businesses or certain businesses with passive investors. The provision ultimately limited the deductibility of business interest expense to 30% of Adjusted Taxable Income (ATI). The OBBBA reinstates a more favorable method of calculating ATI that allows taxpayers to add back depreciation, depletion, and amortization, providing for greater ability to deduct interest expense for equipment-heavy taxpayers.  

Qualified Business Income Deduction Permanently Extended – OBBBA permanently extends the Qualified Business Income (QBI) deduction under IRC §199A. This deduction allows eligible taxpayers, including owners of sole proprietorships, partnerships, LLCs, and S corporations, to deduct up to 20% of their QBI, effectively reducing the top marginal rate from 37% to 29.6% on this income. The permanent extension includes additional modifications that expand eligibility and clarify qualification rules to benefit a broader range of small business owners.  

§179D Energy Efficient Commercial Building Deduction – The §179D deduction has been a useful tool for commercial building owners and certain architects, engineers, and contractors involved in the construction or retrofit of energy-efficient commercial buildings. OBBBA terminates the §179D deduction for property beginning construction after June 30, 2026.  

Individual Tax Provisions  

Tax Rates – The reduced TCJA individual tax rates applicable since 2018 have now been made permanent. The top tax rate remains at 37% rather than reverting to the pre-TCJA era rate of 39.6% after 2025.  

Standard Deduction – OBBBA maintains the nearly doubled standard deduction under the TCJA and increases these amounts for 2025 with inflation indexing thereafter. For 2025, the standard deduction is $31,500 for joint filers, $23,625 for heads of households and $15,750 for single taxpayers and married filing separate taxpayers.  

Child Tax Credit – OBBBA takes the increased child tax credit under the TCJA and permanently increases the base rate from $2,000 to $2,200 for 2025, with annual inflation-adjusted increases. The base refundable portion of the credit is now $1,700, also with annual inflation-adjusted increases.  

SALT Deduction – The State and Local Tax (SALT) deduction provisions resulted in a bevy of new state legislation since the passage of the TCJA, and were the subject of much debate with OBBBA. The TCJA previously limited the itemized deduction for state and local taxes to $10,000. OBBBA now temporarily increases that limitation to $20,000 (single filers) and $40,000 (joint filers) for 2025 with an annual 1% increase in this limit before returning to $10,000 again in 2030. For taxpayers with modified adjusted gross income (MAGI) over $500,000, the SALT deduction is reduced by 30% of the amount by which the taxpayer’s MAGI exceeds that amount, but will not reduce the deduction below $10,000. The $500,000 threshold increases by 1% each year.  

Itemized Deduction Limitation – The TCJA removed the “Pease” limitation on itemized deductions for high-income taxpayers. OBBBA now permanently repeals the “Pease” limitation and replaces it with a new limitation on itemized deductions applicable to all taxpayers in the 37% tax bracket, starting with the 2026 tax year. This reduction in available itemized deductions is a hidden tax increase for itemizers in the top marginal tax bracket.  

Excess Business Loss Cap – The limitation on excess business losses of noncorporate taxpayers is now permanent. It was originally scheduled to expire after 2028.   

Alternative Minimum Tax (AMT) Exemptions – The larger post-2017 exemption amounts remain in place, but the income levels at which the exemption phases out revert to their pre-TCJA starting points – approximately $500,000 (single) and $1 million (joint) in 2025, indexed thereafter. Result: most middle-income filers remain untouched, while very high-income taxpayers may lose more of the exemption than under current rules.  

$6,000 Senior Deduction – OBBBA creates a new deduction for seniors aged 65 and older for the 2025 through 2028 tax years. The $6,000 ($12,000 joint filers) deduction begins to phase out for those individuals with MAGI of $75,000 ($150,000 joint filers), and is fully phased out at $175,000 ($250,000 joint).  

Tips and Overtime Pay Deductions – OBBBA introduces two temporary deductions for tips and overtime pay from 2025 to 2028. Both deductions phase out starting at $150,000 ($300,000 joint filers) of MAGI at a rate of $100 for each $1,000 of income above the threshold.  

Up to $25,000 of cash tips received in an occupation that already customarily received tips on or before December 31, 2024, may qualify for a deduction. Tips that are mandatory service charges, like automatic gratuities, or those received by certain occupations, do not qualify. The Treasury must publish a list of qualifying occupations within 90 days, and employers will be required to report both total cash tips and the worker’s occupation on the 2025 Form W-2.   

For taxpayers who receive overtime pay, up to $12,500 ($25,000 for joint returns) may be deductible. The deduction applies only to the overtime premium required by the FLSA, not the entire overtime payment. For example, if an employee’s base wage is $30 per hour and the FLSA-mandated rate for overtime is $45, only the $15 premium portion is deductible. Contractual “double-time” or state-only overtime rules do not qualify.  

Employers must report the qualified premium separately on Forms W-2 starting with 2025 wages, which will require payroll systems to track regular pay and FLSA-required premiums as distinct items. The Treasury is expected to allow a “reasonable approximation” method for 2025 while programming catches up.  

Vehicle Loan Interest Deduction – Up to $10,000 of interest paid each year on a qualified passenger-vehicle loan may be deductible. A vehicle generally qualifies if its final assembly occurred in the United States and was purchased after 2024. The deduction does not apply to leases or fleet financing. The deduction is available for 2025 through 2028 tax years and begins to phase out once MAGI exceeds $100,000 for single filers ($200,000 joint filers) at a rate of $200 for each $1,000 of income above the threshold. The Treasury has 12 months to prescribe reporting rules for this deduction.  

Trump Accounts – Starting with children born or adopted between January 1, 2025, and December 31, 2028, the Treasury will open a federally administered savings account and seed it with $1,000. Once the program goes live in 2026, parents and others may contribute up to $5,000 per year (aggregated per child). Earnings grow tax-deferred and may be withdrawn without federal penalty for qualified education expenses, up to $15,000 of first-home costs, or up to $25,000 to start or buy a business.   

Think of the accounts as something between a 529 plan and a UTMA/UGMA. It has broader permitted uses than a 529, but less favorable tax treatment. When compared to a UTMA/UGMA, the contributions and earnings in these accounts may avoid kiddie-tax rules while they stay in the account, but funds are locked to the three qualified categories until age 30, so there’s a little less flexibility.  

Expansion of 529 Plan Uses – OBBBA expands permitted uses of funds in 529 plans. Previously restricted to higher education expenses, these accounts can now cover expenses related to elementary, secondary, and home schooling, providing families with broader financial flexibility in managing educational costs.  

Opportunity Zones – The Opportunity Zone program is renewed indefinitely, with zones set to be re-designated every ten years. There’s also a narrower definition of “low-income community,” and a new “Qualified Rural Opportunity Fund” (QROF) that offers investors more substantial tax benefits. QROFs offer a rolling 30% basis step-up after 5 years (compared to 10% for others) and a reduced “substantial improvement” requirement, which reduces the amount that must be reinvested in property improvements.  

Estate and Gift Tax Exemption – The doubled lifetime exemption that was due to sunset after 2025 is made permanent and larger: $15 million per person ($30 million married), indexed for inflation beginning in 2026. By making the higher exemption amounts permanent, the new bill reduces uncertainty surrounding estate planning for taxpayers.  

Green Energy Credits  

Clean Energy Credits – Congress targeted many of the tax credits created under the Inflation Reduction Act (IRA) for elimination with the new bill, primarily as a method for paying for many of the new deductions and similar provisions. These changes significantly reduce incentives for consumer adoption of certain clean energy technologies. While there are some allowances for certain projects, most energy credits under the IRA end after 2025, including:

  • Previously-owned clean vehicle credit
  • Clean vehicle credit
  • Qualified commercial clean vehicle credit
  • Alternative fuel refueling property credit
  • Energy-efficient home improvement credit
  • Residential clean energy credit
  • New energy-efficient home credit  

The passage of the One Big Beautiful Bill Act once again reshapes the tax landscape for businesses and individuals. Many of the provisions are effective for the 2025 tax year, creating the need for careful tax planning strategies and action now to create the most value for you and your business.  

As your trusted advisors, it is our goal to help you find the opportunities most impactful to you and help you continue to succeed in a changing world. We at HSC are continuing to analyze the many provisions under this new bill and will continue to provide relevant and useful guidance throughout the year. For guidance tailored to your individual situation, please reach out to your trusted HSC advisor or contact us at 800.880.7800.

Beneficial Ownership Information (BOI) Reporting

Beginning on January 1, 2024, many companies in the United States are required to report information about their beneficial owners (i.e., the individuals who ultimately own or control the company). Companies must report the information to the Financial Crimes Enforcement Network (FinCEN), which is a bureau of the Treasury Department, through an electronic filing system. The beneficial ownership information (BOI) reporting requirements are part of the Corporate Transparency Act.

Reporting entitiesGenerally, any corporation, limited liability company, or any other entity that is created by filing a document with a secretary of state or similar office under state or tribal laws, or is formed under foreign law and registered to do business in the United States by filing a document with a secretary of state or similar office under state or tribal laws, is a reporting company that must disclose information regarding its beneficial owners and its company applicants to FinCEN under the Corporate Transparency Act.

However, there are exclusions for heavily regulated entities that already report such information to other federal agencies, or companies with real business activities that are not perceived to be a high risk for money laundering. Additionally, the reporting requirements do not apply to an inactive entity.

Beneficial ownerA beneficial owner is an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, either:

  • exercises substantial control over the reporting company; or
  • owns or controls at least 25% of the ownership interests of the reporting company.

However, beneficial owners do not include minor children; nominees, intermediaries, custodians, or agents; employees; inheritors; or creditors.

Company applicant. A company applicant is the individual who files the document with a secretary of state or any similar office under state or Indian tribe law that:

  • creates the domestic reporting company, or
  • registers the foreign reporting company to do business in the United States.

Further, the individual who is primarily responsible for directing or controlling that filing by another individual is also a company applicant.

Information to be reported. A reporting company must disclose the identity of each beneficial owner of the company and each company applicant. For each individual who is a beneficial owner or a company applicant, the reported information must include:

  1. full legal name;
  2. date of birth;
  3. residential street address; and
  4. an identifying number from an acceptable identification document such as a passport or U.S. driver’s license, and the name of the issuing state or jurisdiction of identification document.

The reporting company must also provide an image of the identification document used to obtain the identifying number in item four.

Filing deadlines for initial reports. Domestic reporting companies created or registered to do business in the United States and foreign reporting companies registered to do business in the United States before January 1, 2024, must file their initial report with FinCEN no later than January 1, 2025. Newly created or registered companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.

If your company was created or registered on or after January 1, 2025, it must file its initial beneficial ownership information report within 30 calendar days after receiving actual or public notice that its creation or registration is effective. Additionally, penalties may be imposed for failure to file. If you have any questions on this proposed legislation, please contact your HSC service leader or call our office at 800-880-7800.

IRS moves forward in Employee Retention Credit processing

The Employee Retention Credit (ERC) was introduced as a relief measure to help businesses retain employees during the COVID-19 pandemic. However, the program faced numerous challenges, including a high volume of claims and widespread improper filings. These issues prompted the IRS to implement a processing moratorium in September 2023. 

Since that time, the IRS has engaged in a comprehensive review to determine how to handle the ERC claims made prior to the moratorium. Their latest news release outlines their approach to handling the backlog of claims.

Review and identification of high-risk claims

During the review, the IRS categorized the claims into three risk levels: high-risk, unacceptable level of risk, and low-risk, each requiring a different approach. 

The analysis revealed that 10% to 20% of the claims are classified as high-risk, showing clear signs of error. These high-risk claims will be denied in the upcoming weeks. 

Enhanced scrutiny of medium-risk claims

The IRS has also identified a significant portion of claims, estimated between 60% and 70%, showing an unacceptable risk level. These claims will undergo additional scrutiny to improve the agency’s compliance review. As a result, the majority of claims will be subject to this extended review process, which may lead to delays in processing and notifications. 

Low-risk claims: processing and payment timeline

The IRS recognizes that many small businesses are still waiting on legitimate ERC claims. Approximately 10-20% of these claims are considered low-risk, showing no signs of ineligibility. 

The IRS will begin processing these low-risk claims, with the first payments expected to be disbursed later this summer. Priority will be given to the oldest claims, and the IRS will adjust any claims with calculation errors before payment. 

The IRS has emphasized that no claims submitted during the moratorium period will be processed at this time.

Continued availability of the ERC withdrawal program

The IRS continues to promote the special ERC Withdrawal Program, especially in light of the large number of questionable claims revealed by the recent review. If you submitted an ERC claim in the past but believe you were ineligible for the credit, you can withdraw your claim if it has not been processed yet or if you haven’t cashed or deposited any ERC checks received. The IRS will treat the claim as though it was never filed, with no interest or penalties applied. 

Compliance and advisory measures

The IRS cautions taxpayers who filed ERC claims that the process will take time. If you believe you have a legitimate claim, you do not need to take any action at this point and should wait for further notification from the IRS. The agency also advises against calling IRS toll-free lines, as additional information on these claims is generally not available while processing continues. 

With that said, the ERC Withdrawal Program remains a viable option for those who suspect they may have submitted an ineligible claim. The IRS continues to urge taxpayers with pending claims to review the ERC guideline checklist and consult a trusted tax professional to review eligibility requirements.

If you have questions or concerns about our ERC cliam, contact our professionals.