The IRS recently announced a Voluntary Disclosure Program to help taxpayers who may have claimed the Employee Retention Credit in error. The Voluntary Disclosure Program, which closes on March 22, 2024, allows taxpayers who received the ERC in error to repay only 80% of the claim received.
Other benefits of participating in the program include:
- Any interest received with the ERC refund does not need to be paid back
- Income tax returns should be filed (if needed) to adjust wages expense to the original wage amounts
- The 20% ERC refund that is retained is not taxable as income
- Penalties and interest will not be assessed on the claimed ERC amount if it is repaid with the closing agreement
- The IRS won’t examine ERC claims on any employment tax return for tax period(s) resolved within the terms of the program
Additionally, if you have submitted an ERC claim, but have not yet received a refund, you may be able to withdraw your claim before it is processed.
If you have any questions about the disclosure or withdrawal programs, or if you would like to have your ERC claim reviewed, please contact us for assistance.