A new withdrawal option gives small businesses a way out if they claimed the pandemic-era Employee Retention Credit in error.
The Internal Revenue Service (IRS) recently unveiled a withdrawal process tailored for small businesses. It comes after many businesses may have misclaimed the Employee Retention Credit (ERC), often because of misleading information from ERC promoters, which led the IRS to temporarily pause processing new claims last September.
We want to give these taxpayers a way out.
IRS Commissioner Danny Werfel
What it means for your business
- A path to correct a claim. Businesses that filed an ERC claim they are unsure about can withdraw it through the new process.
- Fewer surprises later. Withdrawing a questionable claim can help avoid repayment problems down the road.
- Talk to a trusted professional. Before you act, review your claim with a reputable tax advisor rather than a promoter.
The move signals the agency’s aim to ease the challenges small businesses faced during a difficult period. For an in-depth look at the change and what it means, read the full report from CNBC.
Source: CNBC, October 19, 2023.
