...<p data-start="41" data-end="366">A client claimed ERC for 2020 and received the funds in 2023. They filed an amended return to reduce their wage expense for 2020. In 2024, the ERC claim for 2020 was disallowed, and the IRS assessed repayment. The client has made installment payments totaling $20,000, while the assessed liability is approximately $185,000.</p> <p data-start="368" data-end="750">According to the IRS FAQ, it seems the client can increase their wage expense on the...

...Confirming treatment of the ERC refunds received in 2025 for CA purposes.  Are these still considered nontaxable and therefore only need to include in federal income for 2025?  Before the March 2025 new process was announced we had amended previous client federal returns but did not adjust CA since they did not conform to the federal treatment at the time.  Looking for confirmation that this treatment has not changed.  Thank you. ...

...I may have been thinking too long about this one.  If we follow the IRS new guidance in the ERC FAQs updated in March 2025, we can treat an ERC refund received in the current year as "Other Income" on the tax return (assuming we have not previously amended returns to reduce wage expense). Treating ERC refund in current year as other income will increase the net income of the S-Corp this year and increase the Shareholder Basis.   This will result in an increase in the AAA account ...

...Taxpayers received ERC payments in 2023 for 2020 and 2021 tax years and reported the income as tax-exempt Income on the S-Corporation 2023 tax returns. We previously filed S-Corp amendments for 2020 and 2021 tax years to reduce related wages by ERC payments received. However, the personal 2020 and 2021 tax returns have not yet been amended. At this point, is it okay to amend 2020 and 2021 individual tax returns? or are we not allowed to and must amend 2023 tax returns to report the ERC Payment...

...I am looking for guidance as to what line item on form 941X to include on form 1120X. Line 18a - Non refundable portion of the employee retention credit, line 26a (refundable portion of employee retention credit, both of which are summarized on line 27 or line 30 the qualified wages for the employee retention credit. The only source that I could obtain was from the IRS which wasn't clear. Can anyone offer clarification? ...

...<p>The taxpayer claimed the Employee Retention Credit (ERC) for 2021 and, in 2024, amended the 2021 tax return to reduce payroll wage deductions accordingly. Can the 2021 return now be amended again to reverse that adjustment, restoring the original wage deduction, and instead amend the 2024 return to report the ERC as income in the year it was received, in order to potentially reduce interest? </p><p>The SOL window stays open until September 2025.</p> ...

...Schedule C Client's old CPA  did amended returns when outside service processed 941x returns Client was caught in the delay and old CPA did second amended return because refunds didn't look like they were coming. IRS had questions and didn't process second 1040x In mean time IRS took from a 23 refund the amount due on 1st amendment Now client actually receives 2020 ERC first part of 2025 . Client wants us to refile the second amendment get a refund for the interest paid and then add th...

...Client received the ERC refund in 2024. I am amending the 2024 S-Corp return and will pass through to their personal returns. My question is do I reduce the wages by the total amount received or do I separate the amount received less the interest received and put the interest under interest income? With the information from Spidell's newsletters and podcast I received, seems that if I separate the interest I will be required to amend the CA return also. What is everyone doing with the refunds...

...If a taxpayer claimed an ERC refund in 2020 and amended the 2020 tax return to decrease the wage deduction, and in 2024 the IRS proposed a change to the ERC refund requiring the taxpayer to repay it, how should the ERC repayment in 2024 be treated on the Form 1120-S? ...

...Taxpayer received 2020 and 2021 ERC refunds in 2025.  Based on new process the ERC refunds will be reported as gross income on the 2025 tax returns. What about general business credit Form 5884-A Employee Retention?  Is this credit lost? ...

...-transcripts/podcast-are-erc-adjustments-required-on-the-california-return ...

...Client received ERC refunds in 2023 and 2024, both associated with 2021 payroll.  I was originally planning to amend 2021 to reflect the refunds. The new (3/20/25) IRS FAQ guidance indicates you "can" now include the income in the year received, rather than go back and amend the prior year return. I would prefer to amend just 2021 rather than both 2023 and 2024. My question is, is the 2021 tax year officially "closed" at this point? If so, I guess I'll be amending the 2023 and 2024 tax ye...

...Do I need to amend my client's 990 to reflect a wage adjustment due to the ERC? Do I report the ERC as a grant? I can't find any info on this topic. ...

...Per Spidell Flash Email 2015-18, IRS is now telling taxpayers to report ERC refunds received in 2024 as income on the 2024 tax return. (As opposed to amending 2020 tax return which is considered a closed tax year). What about ERC refunds received in 2023?  when we prepared the 2023 tax return of a client, we put the 2020 Q2 refund received in 2023 as an M-1 item on the 2023 tax return and informed the client that the 2020 tax return needs to be amended. however, the client never provided w...

...I received an email from KPMG a few weeks ago saying: "The IRS has just released updated ERC FAQs on March 20, 2025, clarifying that protective claims for amended tax returns are no longer necessary. " It went on the give examples about when you can simply include the income in the year you receive the money and not amend the prior returns. I have not heard anything else about this. I was thing Spidell would issue some email flash about it. Is this true? ...

...Spidell, Thanks for the update on the new ERC process just released by the IRS. On Monday, 3/17/2025, we paper-filed an amended 2020 Form 1120S to reduce wages for the ERC credit received in 2024. We were also planning to file amended 1040s for 2020, 2021, and 2022 due to basis and loss carryovers. However, given this new guidance, it would be much simpler to report the ERC as income in 2024 instead of amending three years of returns and later dealing with multiple penalty abatements. Would i...

...2021 ERC claim is due 04/15/25 - taxpayer located in Los Angeles. Is there an extension till 10/15/25 for this deadline as a result of the wildfires? ...

...I have a tax client who applied for the ERTC for tax years 2020 and 2021 and received $60k of refunds from the IRS in 2024 and paid out $17k to the company that processed them for him.   I know the 60k should be applied against payroll in an amended return for 2020 and 2021, but in what year does the $17k get expensed?   In 2024, the year it was paid, or netted against the refunds on the amended returns?   My client shut down his business in 2024 and didn'...

...I have a partnership that closed Dec 31, 2022 and final returns filed. Late 2023/early 2024 they filed amended 941 returns for the 1st and 2nd qt of 2021 for ERC. The received the money November 2024. The money was deposited into partner #1's business account - he said he posted it as owners contribution -- (He opened a business with the similar name as the old business when they folded in 2022 and basically continued the old business under a new S Corp). A 1099INT was sent to report 2024 intere...

...I have amended returns for Schedule C taxpayers for 2020 to add back in the ERC money they received.  The IRS is returning them stating the statute of limitations is up. Any idea of what to do? I can't adjust any basis as they are a proprietorship, not a corp. ...