- Navigating the New Supplemental ERC Claims Process for Third Party Payors
- In the News
PUBLISHED IN
By Don Sniezek, alliantNational Senior Technical Advisor
If you have any questions about this article, please send us a message.
On September 26, 2024, the Internal Revenue Service (“IRS”) launched a new process with the purpose of assisting payroll companies and third-party payors in helping their clients rectify incorrect claims for the Employee Retention Tax Credit (“ERC”).
This process has been referred to as the “Supplemental Claim Process.” The program applies to third-party payors, including Professional Employer Organizations (“PEOs”), Certified Professional Employer Organizations (“CPEOs”) , and IRC 3504 agents with outstanding, unprocessed ERC claims filed on or before January 31, 2024.
“The supplemental claim program is a critical step to improve the IRS’s ability to process Employee Retention Credit claims for this more complex segment of taxpayers,” said IRS Commissioner Danny Werfel.
Background on the Employee Retention Tax Credit
The ERC was established under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act to provide financial relief to businesses that retained employees during the COVID-19 pandemic. However, the application process for this credit has been complex, even more so for third-party payors, leading to confusion and, in some cases, incorrect ERC claims.
Why Engage with the New Supplemental Claim Process?
While voluntary, the Supplemental Claim Process can ensure your claims are compliant, reduce your risk of tax liability, and possibly speed up your claim evaluation by the IRS. A Supplemental Filing effectively replaces the original third-party payor ERC claim (for those filed before January 31, 2024), offering a new avenue to exclude improper client claims or correct previously miscalculated ones. This supplemental claim process lets a third-party payor that filed a prior claim with multiple clients “withdraw” only some clients while maintaining the claims of the qualifying clients.
Our Services to Third Party Payors
Our team is fully equipped to assist PEOs and CPEOs with the heavy lifting associated with such complex and detailed tax adjustments. We understand the challenges of these complexities, including the fact that some of your clients may have filed ERC claims on their own behalf using your EIN, or that a single client listed on your return (with an erroneous claim) may be holding up the IRS’s ERC processing for numerous other clients listed on the same return. By taking advantage of our services, we can help “untie this knot” and you can focus on your core operations while we ensure that your claims are properly filed, compliant, and poised for quicker processing.
Deadlines You Can’t Afford to Miss
The deadline to file your Supplemental Claim is 11:59 p.m. on November 22, 2024, so time is of the essence for such a highly complex analysis and filing.
The supplemental claim process is separate and distinct from other initiatives the IRS has announced over the past several months for resolving ERC claims, such as the ERC voluntary disclosure program and the ERC withdrawal program.
Partner with Us for a Professional-Transparent Experience
The IRS recommends that taxpayers, “work with a trusted tax professional” if they need help or advice on this process or on the ERC. Let us be your trusted partner in mastering these regulatory challenges. Engage our expert services to help you with this new and complex process. Time is short and the window to “get right with the IRS” is closing.
Contact us today to ensure your organization’s filings are handled timely, with accuracy and precision.
Donald Sniezek is a Senior Technical Advisor at alliantNational and an Enrolled Agent. He spent more than 34 years of his career at the Internal Revenue Service, holding a number of Senior Executive Service positions culminating in appointment as Director of Examination Headquarters for the Small Business and Self-Employed (“SBSE”) Division.
