The IRS has recently issued guidance regarding the retroactive termination of Employee Retention Credits (“ERC”). ERC was supposed to be available until the end of 2021. 

However, as part of the infrastructure Investment and Jobs act (passed November 15, 2021), the ERC was terminated as of September 30, 2021, for all companies, except for a Recovery Start up Business. 

The issue is that many companies had already started reducing their payroll deposits or requesting an advance of the ERC in anticipation of getting ERC on their fourth quarter 2021 payroll forms. This leaves companies not knowing what to do now that the ERC has been retroactively terminated for the fourth quarter of 2021. 

The IRS issued Notice 2021-65 to help employers deal with these issues. The notice advises employees on what they need to do if they had received advance payments, or reduced tax employment deposits to avoid penalties.

Doug Finkle is a Tax Director at SobelCo with over twenty years of experience in handling tax compliance for corporations (including consolidations), partnerships, S corporations and high net worth individuals. Doug is well respected for sharing his in-depth knowledge of tax laws and regulations, most particularly by leveraging his deep involvement with tax planning and developing tax minimization strategies for clients.