ERC payment

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I have a new client 1120-S, who has received ERC payments of $280,000 from IRS in July 2023. How, when & where do I report this on clients tax return. Thank you in advance.

Lacerte Tax

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sjrcpaAnswer

Level 15

Wages

The more I know the more I don’t know.

T

TaxGirl3

Level 5

ERC reduces otherwise deductible wages. You need to reduce wage expense in the relevant year. Perhaps you need to amend prior tax returns.

abctax55

Level 15

Perhaps ?

I would insist on the amending, & probably disengage if the client refused. And if the entity that received the ERC is a partnership/S-Corp there should also amended returns for the partners/shareholders.

The IRS did issue a notice that the penalties & interest could be waived on the tax due on these amended downstream returns - I don't remember the specifics.

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