As you know, if you have applied for the Employee Retention Tax Credit (ERC), you MUST amend your business and personal income tax returns, when you have received your ERC refunds. The Statute of Limitations requires that amended returns be filed within 3 years of the due date for filing the returns, including extensions. That means for business returns (S Corporations and Partnerships) with a 12/31/2020 Year- End and thus a 3/15/2021 filing due date, the amended returns are due no later than March 15, 2024. Today is March 8. ERC Filers therefore only have until March 15 to file their amended business income tax returns.

If you haven’t filed already, we strongly urge you to contact your Tax Professional immediately, or contact Ronald Whaley, CPA at Stenson Tamaddon, who is heading up the StenTam amended income tax return team. His email is: ron.whaley@stentam.com.

However, if you have not received all of your ERC refund checks for 2020, the question arises as to whether you must amend your business and personal income tax returns until or unless you do. The answer is that while the IRS is instructing tax professionals they must file the amended income tax returns for 2020 by the March 15, 2024 due date to accommodate the Statute of Limitations, even if you have not yet received all of your ERC refund money – or even if you haven’t received any.

The problem is that same Statute of Limitations applies to requesting a refund if you never receive the ERC money. Therefore, if you never receive the money claimed, you may not be able to request a refund; although we note there is a provision called a “Protective Claim of Refund” that may resolve that problem at least in some cases.

One possible solution is to file the amended return, but only pay the resulting tax based on the refund checks you have received. While the IRS may impose penalties and interest on the unpaid portion, you may request abatement for those penalties because you haven’t actually received the money.=

Regardless, you must take the steps immediately to amend your business and personal tax returns for at least 2020, if not 2021 as well.