The IRS has issued guidelines about how to withdraw Employee Retention Credit (ERC) claims that were filed improperly.

The ERC is a complex credit with precise requirements created to help small businesses during the pandemic, and the IRS has received approximately 3.6 million claims for the credit over the course of the program. The agency announced in September a moratorium at least through the end of this year on processing new claims so it can protect small business owners from scams.

Under the new withdrawal option, certain employers who have filed an ERC claim but have not received a refund can withdraw their submission and avoid future repayment, interest and penalties. Employers that have submitted an ERC claim that’s still being processed can withdraw their claim and avoid the possibility of getting a refund for which they’re ineligible.

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