Mike C Manoloff CPA CTC

ERTC Status 5-8-2022 Amending Returns

ERTC (rough timeline of events)

 Video Overview:

https://youtu.be/5itRX5-mvLk

ERTC program came out March 2020

ERTC program updated December 2020

IRS provides guidance in August 2021 – 16 months after the program started guidance was issued.   Most business returns which has these credits have already been filed.

As of 10-16-2021 the IRS is currently taking about 8 months to process these refunds.  This 8 month period was prior to them receiving an additional 284,000 plus requests since February of 2021……, ie in mid August they had a back log of about 1.9 million payroll returns to process, plus the 284,000. 

They need to process the related 941’s first before the 284,000 of 941 x’s they have on hand for ERTC checks to get issued.

 The time-line - could extend out further than 8 months.

Requirement is – the year that a credit is claimed for is the year it must be reported on the tax return for the year the credit apply’ s to.

A credit for 2020 which may be received in 2021 or in 2022 or even 2023 must be reflected on the 2020 return.  The 2020 return must be amended.

Our position – 

1.       Wait till the refund arrives then amend.

2.      Congress might overrule the IRS and it could be in the year received.  So better to wait at this time than to amend.  Low probability that Congress will change IRS rule.

3.      The tax software is not yet updated, they are attempting to understand from the IRS technical folks how / what form does it get reported on etc…