The Employee Retention Credit (ERC) filing window has closed, but the story isn’t over. Congress and the IRS tightened the rules in 2025, and audits/cleanups are accelerating.
What changed
- Filing window ended: The ERC claim period is closed (April 15, 2025 was the final date for 2021 claims). Taxpayer Advocate Service
- **Q3–Q4 2021 claims filed after Jan 31, 2024 are now disallowed under the One Big Beautiful Bill Act (OBBBA); the audit window for those quarters extends to six years. Thomson Reuters Tax+2RSM US+2
- Voluntary Disclosure Program: The second ERC-VDP closed Nov. 22, 2024; however, the withdrawal program for unpaid claims remains available. IRS+2IRS+2
If you claimed ERC (or were pitched by a “mill”)
Triage your file now:
- Pull eligibility memos, gross-receipts tests, government-order analyses, and payroll reports by quarter (2019–2021).
- If your claim is pending/unpaid and looks weak, consider withdrawing to avoid penalties/interest. IRS
- If you were paid and later doubt eligibility, talk to counsel about repayment paths and amended returns (VDP is closed, but options remain). IRS
Documentation to keep for audits (6-year window for late-filed 2021 Q3/Q4): payroll journals, PPP interaction schedules, gross-receipts calculations, contemporaneous notes, and all correspondence with advisors. Thomson Reuters Tax+1
Red flags the IRS is focused on
- “Supply chain” eligibility without tying to a specific governmental order.
- Copy-and-paste eligibility letters.
- Double-dipping wages with PPP forgiveness.
Expect increased promoter penalties and stricter due diligence expectations. Thomson Reuters Tax
Your action plan
- Risk review of each quarter and advisor workpapers.
- Decide: defend, correct, withdraw, or repay.
- Prepare audit-ready binders (digital + paper).
- Monitor notices and respond on time to protect appeal rights.
Need help? Black Inc can assess your ERC file, coordinate withdrawals or corrections, and prepare an audit-defense package.
Sources: IRS ERC pages (program closure & withdrawal), National Taxpayer Advocate, and practitioner analyses on OBBBA’s six-year audit window and disallowance of late 2021 claims. Thomson Reuters Tax+4IRS+4IRS+4