Information on the ERC Voluntary Disclosure Program

On Dec. 21, 2023, the IRS announced the details of the Employee Retention Credit Voluntary Disclosure program (ERC-VDP) for employers who claimed and received an ERC refund for a quarter but were not in fact eligible for the credit. Please see below the repayment terms, benefits, and eligibility for this program:

  • You need to repay 80% of the ERC you received as a credit on your return or as a refund.
  • You don’t need to repay any interest you received on your ERC refund.
  • The 20% of the ERC credits you keep is not taxable as income.
  • The IRS will not charge penalties or interest on the claimed ERC amount if you pay back 80% of the claimed ERC.
  • The IRS won’t examine ERC on your employment tax return for tax period(s) resolved within the terms of ERC-VDP.
  • The ERC-VDP is open through March 22, 2024.

If you used a third-party payer to file your employment tax returns or claim your ERC, you can’t apply to the ERC-VDP yourself. You must contact the third-party payer to apply.

If MKA completed your ERC calculation and amended payroll returns you can be assured that you do not need to return any ERC funds you received. We are confident that all calculations and amendments pass the eligibility test based on the information provided to us.

If you have questions regarding this program or the ERC, please contact our firm at (407) 644-5811 and ask for Jamie Breyette. We will be happy to answer any questions you may have.

Note: This program is part of a continuing IRS initiative to combat ineligible ERC claims. The ERC program is expected to be under IRS scrutiny for the foreseeable future.

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