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  • 1.  How to handle ERC payments received

    Posted 05-04-2023 05:04 PM

    I have a client that is an S-Corp that received ERC payments in 2022.  The ERC payments relate to 2020 & 2021.  The S-Corp has 8 shareholders.  As I understand, the S-Corp needs to file amended 2020 & 2021 tax returns.  In addition, each shareholder then needs to amend their Individual 2020 & 2021 tax returns...for both Federal and State.  That's a total of 34 amended tax returns.

    Can I include the ERC payments received in 2022 in the 2022 tax returns?  Then I wouldn't have to amend 34 tax returns.

    Please let me know your thoughts.



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    Harlan Schier
    Harlan Schier, CPA
    Melville NY
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  • 2.  RE: How to handle ERC payments received

    Bronze Most Valuable Member
    Posted 05-05-2023 10:10 AM
    ERC payments are the result of filing a 941X. This then requires amending the affected tax return to reduce the wage deduction. Each shareholder will receive an amended K1. 
    The shareholders will then decide if their tax return should be amended based upon their personal tax situation. It goes without saying that the shareholders should be advised to amend.   

    Frank Sands, CPA
    Managing Partner

    Sands, Gililland & Co., P.C.
    Certified Public Accountants
    400 Chisholm Place, Suite 213
    Plano, TX  75075
    972.516.4868  Office
    972.516.4881  Fax
    http://www.sgcompanycpas.com/. Click or tap to follow the link." style="margin: 0">www.sgcompanycpas.com




    Original Message


  • 3.  RE: How to handle ERC payments received

    Bronze Most Valuable Member
    Posted 05-05-2023 11:45 AM

    IR-2022-89 is titled with penalty relief, but includes the statement that the employer must reduce its income tax deduction for the ERTC in the year such wages were paid or incurred.  The taxpayer "may be eligible" for relief from penalties with reasonable cause, or the First Time Penalty Abatement.  

    I have not yet determined if the fees/costs related to the wage reduction can be included in the same accounting period that they relate to, instead of the period that they were incurred during the process.




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    Martha Berghahn CPA
    BERGHAHN TAX AND ACCOUNTING SOLUTIONS, LLC
    Sparta NJ
    914-260-1587
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    Original Message


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The opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute an accounting opinion.