The Employee Retention Credit (ERC) landscape has shifted, and understanding the latest developments is crucial for businesses. If you’re an employer navigating the ERC, buckle up – here’s a quick rundown of what you need to know.
Moratorium on New Claims: As of September 14, 2023, the IRS imposed a moratorium on processing new ERC claims. This move stems from concerns about a surge of ineligible claims fueled by aggressive marketing. The moratorium is currently in place until at least the end of 2024.
Processing Delays for Existing Claims: Existing claims submitted before the moratorium are still being processed, but expect a slower pace. Due to stricter compliance reviews, the standard 90-day processing goal has been extended to 180 days, and may take even longer if further reviews or audits are required.
New Withdrawal Option: Worried about an ineligible claim you filed? The IRS introduced a special withdrawal process to help businesses rectify potential errors. You can withdraw your claim through Form 941-X (amended quarterly tax return) before the IRS begins processing it.
What To Do Now:
For new claims: Wait until the moratorium is lifted, then carefully review your eligibility before submitting a claim. Consider seeking professional assistance to ensure compliance.
For existing claims: Be patient with the processing timeframe. If you have concerns about your claim’s eligibility, consider withdrawing it before the IRS starts reviewing it. You can find detailed instructions on the IRS website (https://www.irs.gov/newsroom/withdraw-an-employee-retention-credit-erc-claim).
Seek Expert Guidance: The ERC withdrawal process can be complex. Consult a tax professional or an experienced ERC specialist to navigate the nuances and ensure a smooth withdrawal.
Remember, understanding and adapting to the evolving ERC landscape is key to protecting your business and maximizing your potential refund. Don’t hesitate to seek professional help if you need it!
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