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As the agency moves forward, it will now start judiciously processing claims filed between Sept. 14, 2023, and Jan. 31, 2024. Like the rest of the ERC inventory, work will focus on the highest and lowest risk claims at the top and bottom end of the spectrum.
The statute of limitations (SOL) on amending payroll tax returns (Form 941-X) for 2021 ends on April 15, 2025, and the ERC ends on the same date. Legislators attempted to end the ERC on January 31, 2024, as part of H.R. 7024, but this bill failed in a Senate roll call vote in early August 2024.
On August 15, 2024, the IRS unveiled its second Voluntary Disclosure Program (VDP), marking its latest move on the ERC. The IRS had implemented a VDP last December that expired on March 22, 2024, allowing taxpayers to repay 80% of their ERC claim that they determined they were not eligible for.
On Aug. 15, 2024, the IRS announced the details of a second employee retention credit Voluntary Disclosure program (ERC-VDP) for employers who claimed and received an ERC refund for a tax period in 2021 but were not eligible.
In light of the large inventory and the results of the ERC review, the IRS will keep the processing moratorium in place on ERC claims submitted after Sept. 14, 2023. The IRS will use this period to gather additional feedback from partners, including Congress and others, on the future course of ERC.
To protect taxpayers from getting an improper refund they’d have to repay, the agency will deny tens of thousands of ERC claims that show clear signs of being erroneous.
The ERC Voluntary Disclosure Program, available through March 22, 2024, is for employers who need to repay ERCs they received through Dec. 21, 2023, either as a refund or as a credit on a tax return. This option lets a taxpayer repay the incorrect ERC, minus 20%, for any tax period they weren’t eligible for the ERC.
Learn about the latest updates for ERC, what the Employee Retention Tax Credit is, who qualifies, and if you are leaving money on the table.
The deadline for the initial program was March 22, 2024. Thousands of businesses looking to revise ERC claims at a discount will now get a second chance, as the IRS recently announced the...
When can ERC refunds be expected? The IRS says it is issuing 50,000 valid ERC claims. The agency has identified these claims as being at “low-risk” of improper filing. When issuing funds for these...