Employee Retention Credit Voluntary Disclosure Program (ERC-VDP) Closing on November 22, 2024

The second Employee Retention Credit Voluntary Disclosure Program (ERC-VDP) is closing on November 22, 2024. Continue reading to learn more about the program, key benefits, and how to apply if eligible.

The ERC-VDP

What does it do?

• Encourage compliance: By offering a way to correct ineligible claims without severe financial repercussions.
• Reduce audits: Participants who repay the ERC through the VDP will not be subject to audits for the periods covered by the program.
• Simplify repayment: Businesses only need to repay 85% of the ERC received, avoiding the need to amend income tax returns to adjust wage expenses.

Key benefits

• Discounted repayment: Only repay 85% of the ERC received.
• No penalties or interest: Avoid penalties and interest if the repayment is made in full by the deadline.
• Audit protection: The IRS will not audit the ERC for the tax periods covered by the program.
• Simplified process: No need to amend income tax returns to reduce wage expenses.

Eligibility

• The ERC was claimed and received for 2021 tax periods.
• The ERC was processed and paid as a refund or credit.
• The entity is not under IRS employment tax examination or criminal investigation.
• If you used a third-party payer to file your employee tax returns or claim your ERC, you can’t apply to the second ERC-VDP yourself. You must contact the third-party payer to apply.

Learn more about determining eligibility on the IRS website.

How to apply

1. Complete and submit the application package for the second ERC-VDP.
2. Voluntarily repay the ERC, minus 15%.
3. Cooperate with any IRS requests for additional information.
4. Sign a closing agreement with the IRS.

The program is open until November 22, 2024. For more information and assistance with your application package, please consult with a trusted Perkins tax professional.