Employee Retention Credit Audits Are Heating Up —Here’s How to Stay Safe
If you claimed the Employee Retention Credit (ERC) for 2021, the IRS wants to talk. They’ve issued new FAQs clarifying that refunds and credits filed after January 31, 2024, may be denied or clawed back under the One Big Beautiful Bill.
What’s the ERC?
It’s a tax credit for businesses that kept employees on payroll during COVID disruptions. Many small businesses claimed it retroactively, but some did so because of aggressive marketing or unclear eligibility requirements.
What’s New?
• The IRS is limiting refunds for late-filed ERC claims
• They’re auditing high-risk filings
• Businesses may need to repay credits if they don’t meet the updated criteria
What You Can Do
• Review your ERC claim with a trusted advisor
• Gather documentation—payroll records, eligibility calculations, and correspondence
• Avoid promoters offering “guaranteed” refunds
If you didn’t claim the ERC, you’re in the clear. But if you did, now’s the time to double-check your paperwork.
Source: IRS ERC FAQs – IR-2025-106
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CompliantHer™ program of (Relannford Enterprises LLC) is not a law firm. This document is intended for educational and informational purposes only and does not provide medical, legal, or financial advice. If you have questions about your specific situation, please consult a physician, attorney, or accountant licensed to practice in your state and/or country.
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