ERC Correction Deadline Extended to December 31

It looks like the IRS is feeling a little generous this holiday season. 🎄

The agency has extended the deadline for third-party payers to resolve clients' incorrect Employee Retention Credit (ERC) claims from November 22nd to Tuesday, December 31, 2024 before midnight.

PEO's, or Professional Employer Organizations, are third party providers that file tax returns under the PEO's EIN. These services report the client's employees under the PEO account with the IRS unlike traditional payroll companies that file tax returns on behalf of the client using the client's EIN.

PEO's, CPEO's, and other third-party payers, will now have until 11:59pm on December 31st, 2024 to withdraw any outstanding erroneous ERC claims on behalf of their clients, using the IRS' consolidated claims process, which allows them to file on behalf of many clients using a single claim. 

The November deadline was initially set to coincide with the closing of the IRS' ERC Voluntary Disclosure Program (ERC-VDP), which gave employers who received ERC payouts erroneously the opportunity to pay them back at a discounted rate, amongst other incentives. The Voluntary Disclosure Program closed on November 22nd as planned. 

With the end of the VDP, withdrawal is currently the only remaining option to proactively resolve these ERC claims without the risk of penalty. 

As of the publishing of this article, there have been no plans announced by the IRS to extend the deadline any further than December 31, 2024. 

See Also: 

• IRS Advances ERC Processing & New Third-Party Payer Option for Small Businesses
• IRS Alerts on Incorrect Employee Retention Credit Claims