Click here to read the IRS’ press release about slowing payment of ERC refunds

The IRS announced this week that it is increasing scrutiny on “dubious submissions” for the Employee Retention Credit (ERC), slowing the pace of tax refunds to employers. The announcement comes as aggressive promoters target businesses with misleading claims about the credit’s eligibility requirements. In March, the IRS spotlighted this scam in its annual “Dirty Dozen” list of tax scams.

ERC Eligibility

Per the IRS, there are three specific eligibility requirements for claiming the ERC:

  • Sustained a full or partial suspension of operations due to an order from an appropriate governmental authority limiting commerce, travel or group meetings because of COVID-19 during 2020 or the first three quarters of 2021,
  • Experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021, or
  • Qualified as a recovery startup business for the third or fourth quarters of 2021.

Businesses have until April 15, 2024 to file amended returns for 2020 Q2, Q3 and Q4, and until April 15, 2025 to file amended returns for the quarters in 2021 they were eligible to claim the ERC.

ERC Federal Resources