Penalty Relief Related to Advance Employee Retention Credit

The Infrastructure Investment and Jobs Act retroactively terminated the employee retention credit at the end of September 30, 2021, instead of running through the end of the year (other than for “recovery startup businesses”). As a result, some employers may have received too much via advance credits or reduced employment tax deposits. The IRS won’t impose a failure-to-pay penalty if the shortfall is properly accounted for (e.g., correct mistaken deposits; report the correct liability on Form 941 for Q4). Can’t meet this condition? When you get a notice of penalty, attach a statement and try to qualify for reasonable cause relief. #IdeaoftheDay