Employee Retention Credit Programs

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Employee Retention Credit Programs

January 25, 2024

Employee Retention Credit Programs

During the height of the COVID-19 pandemic, the Employee Retention Credit (ERC) was offered to businesses to provide much-needed relief to both employers and employees. The IRS noticed that the ERC, which expired for most employers by the end of the third quarter of 2021, continued to be claimed retroactively due to aggressive marketing schemes. The IRS stated that many of these claims are invalid.

Employee Retention Credit Voluntary Disclosure Program

We want to make you aware that the IRS recently announced a Voluntary Disclosure Program to help taxpayers who may have claimed the ERC in error. The Voluntary Disclosure Program allows taxpayers who received the ERC to repay only 80% of the claim received.

Other benefits of participating in the program include:

  • Any interest received on an ERC refund does not need to be repaid.
  • Income tax returns do not need to be amended to reduce wage expense.
  • Penalties and interest will not be assessed on the claimed ERC amount (Claimed ERC minus 20%).
  • The IRS won’t examine ERC claims on any employment tax return for tax period(s) resolved within the terms of the program..

However, participation in the program closes on March 22, 2024, so time is limited to act.

For more information, or to apply for the program please visit the IRS website at https://www.irs.gov/coronavirus/employee-retention-credit-voluntary-disclosure-program.

Employee Retention Credit Withdrawal Program

The IRS also is offering an ERC withdrawal program. If you have submitted an ERC claim, but have not yet received a refund, you may still have an opportunity to withdraw your claim before the claim is processed. For more information, or to apply, visit the IRS website at .


Proposed End to Employee Retention Credit Application

The Proposed Tax Relief for American Families and Workers Act includes a provision that would accelerate the deadline to claim the Employee Retention Credit. The new deadline for applying for the credit would be January 31, 2024. This bill has not passed yet, but we wanted you to be aware of potential changes coming.

If we can be of any assistance, please let us know.