Employers who improperly received tax credits to retain workers during the pandemic have returned more than $225 million to the IRS as part of a voluntary disclosure program that ended on March 22.

Congress created the employee retention tax credit, or ERC, to encourage employee retention. However, the credit spawned a number of fraudulent or ineligible claims. Last September, the IRS issued a moratorium on processing new claims, increased audits and gave employers ways to withdraw pending claims or send back money they already had received

The money returned so far came from more than 500 employers who were required to disclose information about ERC firms they used to seek the credit. The IRS is reviewing 800 additional submissions, and more were arriving at the deadline, so the repayment total is expected to grow. Under the disclosure program, employers who determined they weren't actually eligible were allowed to keep 20% of the money, often about equal to the fees paid to ERC firms. The employers also got relief from interest and civil penalties.