What Is the ERC and Why Review Your Filings?
The Employee Retention Credit (ERC) is a tax credit created to help businesses keep employees on payroll during tough times. Many companies claimed this credit between 2021 and 2024, but the IRS is now reviewing these filings closely. Mistakes in your ERC filings can lead to IRS penalties if not corrected early.
When you review ERC filings, you make sure that the information you sent to the IRS is correct. The IRS has stated that some businesses claimed too much credit or did not meet all requirements. By going back and checking your paperwork, you can find errors before the IRS does. This step can save you money and stress. If you claimed the ERC from 2021–2024, it’s important to review your filings now rather than wait.
How Incorrect Claims Cause IRS Penalties
The IRS can issue penalties if a business claimed credits they were not eligible for. For example, some companies misunderstood the rules for qualifying wages. Others used bad advice from third-party firms that promised big refunds. If these errors are not fixed, the IRS can demand repayment with interest and penalties.
When you review ERC filings, you can catch these mistakes early. You can correct 2021–2024 credit claims before the IRS takes action. The IRS has created a voluntary disclosure program that allows businesses to repay incorrect credits with reduced penalties if they act soon.
Steps to Review ERC Filings
- Check Eligibility Rules
Re-read the ERC rules for 2021, 2022, 2023, and 2024. Was your business truly affected by shutdown orders or a drop in revenue? Did you count all wages correctly? - Audit Payroll Records
Match your payroll reports to the ERC calculations you submitted. Errors in wages or health insurance costs can lead to incorrect credits. - Seek Expert Help
Tax professionals can help you review ERC filings with the IRS rules in mind. They know how to file corrections for past returns. - File Corrections Early
If you find errors, file amended returns as soon as possible. Fixing mistakes now can help you avoid penalties later.
Why Act in 2025?
The IRS has made it clear that they will be increasing audits of ERC claims. Businesses that fail to review and correct their filings from 2021–2024 risk higher fines. By reviewing your filings now in 2025, you stay ahead of potential problems.
A smart business owner should make time to review ERC filings this year. Even if you think your claims are correct, it’s better to double-check.
Conclusion: Protect Your Business
The ERC was a lifeline for many businesses, but incorrect claims can turn into financial headaches. By reviewing your ERC filings from 2021–2024, you can correct mistakes early and avoid IRS penalties. The process takes time, but it’s worth it.
Don’t wait until the IRS sends a notice. Take action today—review ERC filings and stay safe in 2025.
