Fort Smith Regional Chamber of Commerce issued the following announcement on Dec. 09.
The Internal Revenue Service has issued guidance for employers regarding the retroactive termination of the Employee Retention Credit. The new Infrastructure Investment and Jobs Act that was recently passed retroactively changed the end date for the ERC credit to October 1.
The guidance, which was released Monday, outlines the repayment of advance payments and the failure to deposit penalties for employers.
Businesses that received advanced payments via Form 7200 for the fourth quarter can avoid penalties if they simply repay them by the time their tax returns are due (e.g. Form 941).
For employers that reduced deposits expecting to claim the credit in that quarter, the IRS will waive penalties if the business followed rules to claim the credit, deposited the amounts they retained and report how much they owe the IRS in the fourth quarter. Businesses have only two weeks to follow those rules before penalties kick in. Failure to deposit payroll taxes by December 20 will incur penalties.
Businesses deemed as a “recovery startup business” can continue to claim the credit through the end of the fourth quarter and are exempt from the guidance.
A link to the full guidance is below. If you have any questions about the ERC, please give us a call.
Original source can be found here.
Source: Fort Smith Regional Chamber of Commerce
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