Early in 2020, the IRS created procedures to allow employers to quickly take advantage of the FFCRA and CARES Act tax credits.  Now, the IRS has released temporary regulations that allow the IRS to recapture any of the tax credits credited to an employer in excess of the amount that the employer was actually entitled to receive.  The regulations provide that any amount of the credits for qualified leave wages, credits for qualified health plan expenses under sections 3131(d) and 3132(d), and any amount of the employee retention credit that were erroneously paid or credited to the employer can be recaptured.  Those incorrect tax credits will be treated as underpayments of  taxes and may be administratively assessed and collected in the same manner as the taxes. The temporary regulations also provide that the calculation of any credits erroneously claimed must take into account any amounts that were advanced to the employer under the processes established in 2020.  For more information on the employee retention tax credit, visit Tax Facts Online. Read More

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