Federal Tax, Tax

ERC Penalty Relief Available to Certain Businesses

Relief is available to businesses if they owe penalties for additional income tax due to retroactive employee retention credit (ERC) claims. The ERC is a refundable credit claimed on employment tax returns. The IRS requires employers to reduce the income tax deduction for “ERC qualified wages” by the amount of ERC the employer received for the wages. Taxpayers that retroactively claimed an ERC were required to file an amended return reflecting the reduced wage deduction, which increased their income tax. Many can’t pay their increased tax because they haven’t received their ERC payments due to an IRS backlog in processing some employment tax returns. Click here to learn more. Questions? Contact Cg Tax, Audit & Advisory. © 2022