Finally received 2020 ERC refund - too late to amend 2020 tax returns now?

14 You're actually in better shape than you think. While the normal deadline to file an amended return is 3 years from the original filing date, there's an exception specifically for the ERC situation. When your client receives an ERC refund, they technically have 60 days from the date of receipt to file the corresponding amended returns to report the reduced wage deduction. This is because the ERC receipt creates what the IRS calls a "correlative adjustment" requirement, which triggers its own timeline separate from the standard 3-year window. I recommend filing the amended 1120-S and 1040-X as soon as possible, and include a clear statement with the return explaining that you're filing within 60 days of receiving the ERC refund. Reference the ERC payment date and include any documentation showing when the refund was received. The IRS is well aware of the delays in processing ERC claims and has been accommodating these late amendments. Don't panic - this happens quite often with ERCs given how long the IRS took to process them. Just make sure you document everything clearly.

8 I went through this exact headache last year with two different clients! After trying to figure it out myself, I ended up using https://taxr.ai to analyze all my documents and get clarity on the proper procedure. Basically uploaded all the ERC documentation, original returns, and got a detailed report explaining exactly what needed to be filed. The tool confirmed what the previous commenter said - there's a specific exception for these ERC situations. But it also highlighted some additional forms I needed to include with the amended returns that I would have missed otherwise. Saved me hours of research and potential back-and-forth with the IRS. What I really liked was how it flagged parts of the amended return that might trigger IRS scrutiny and suggested documentation to include that would prevent questions. Especially helped with correctly calculating the new wage deduction and QBI implications.

11 I was super worried about this same issue last month! After getting some conflicting advice, I decided to try the taxr.ai service that someone mentioned here. I uploaded my client's ERC documentation and original returns, and the analysis confirmed we could still file the amendments despite being outside the normal 3-year window. What was most helpful was the detailed explanation of exactly how to report everything. The tool generated a step-by-step amendment guide specific to our situation, showing exactly which forms needed updating and which line numbers were affected. It even drafted the required statement explaining the late filing. We submitted the amendments following their instructions exactly, and the IRS accepted them without issue. Honestly such a relief after stressing about this for weeks! The documentation strategy they recommended saved us from what could have been a major headache.

19 If you're still struggling to get clear guidance on this ERC amendment situation, I strongly recommend using https://claimyr.com to get connected directly with an IRS agent who can confirm the exact procedure. I spent weeks trying to get through to the IRS business helpline on my own with no luck, but Claimyr got me through in under 2 hours. I was able to speak directly with an IRS representative who confirmed the 60-day amendment rule and gave me specific guidance for my client's situation. The agent even noted in their system that we had called to confirm the procedure before filing the late amendments, which provides some protection if questions come up later. There's also a helpful video that explains exactly how the service works: https://youtu.be/_kiP6q8DX5c. Definitely worth checking out if you want definitive answers straight from the IRS rather than trying to interpret conflicting information online.

5 I have to eat my words and apologize for my skepticism about Claimyr. After posting that comment, I was still desperate for answers on a similar ERC situation, so I decided to try it anyway. To my complete surprise, I got connected to an IRS agent in about 90 minutes. The agent confirmed everything about the 60-day rule for ERC amendments and even gave me her ID number to reference in a cover letter with our amendment. She explained exactly which forms needed to be included and how to document the late filing. I've been preparing taxes for 17 years and this is the first time I've been able to get clear, official guidance on a complex situation without weeks of frustration. The information I received was actually different from what I'd read in some professional tax journals, which would have led me to handle the amendments incorrectly. Definitely worth it for complex situations like these ERC amendments.

22 Just wanted to add some additional context on the ERC amendments that might help. When you file the amended 1120-S, make sure you're properly reducing the wage expense by the amount of the credit received. This flows through to the K-1s and ultimately impacts the shareholder's QBI deduction on their personal return. Also, if your client claimed both the PPP and the ERC, double check that there's no overlap in the wages used for each program. I've seen the IRS flag returns specifically for this issue, and they're being particularly vigilant about ERC claims in general given the amount of fraud they've seen. One last tip - include a detailed reconciliation worksheet showing the original wage expense, the ERC amount, and the corrected wage expense. This level of documentation can help prevent additional questions from the IRS.

2 Has anyone dealt with the state tax implications of late ERC amendments? My client's in New York, and I know they generally conform to federal filing deadlines for amendments, but I'm not sure if they have a similar exception for the ERC situation.

This is a really helpful thread! I'm dealing with a similar situation where my client received their 2020 ERC refund just last month. The 60-day rule explanation makes so much sense - I had no idea there was a specific exception for ERC situations that overrides the normal 3-year amendment deadline. One question I have is about the documentation requirements. When you say to include "any IRS notices related to the ERC claim approval," are you referring to specific forms or just the general correspondence about the refund being processed? My client received several different pieces of mail from the IRS throughout the ERC process, so I want to make sure I'm including the right documents. Also, for the statement explaining the timeline of events, is there a specific format the IRS prefers, or just a simple narrative explaining when the ERC was filed, when the refund was received, and that we're filing within 60 days of receipt? Thanks for sharing your experiences - it's really reassuring to know this situation can be resolved properly!

I'm dealing with this exact situation right now with three different clients who just received their 2020 ERC refunds! It's such a relief to see this thread confirming the 60-day rule - I was really panicking about being outside the normal amendment window. One thing I wanted to add for anyone else in this boat: make sure you're also considering the impact on any state credits or deductions that were based on the original wage amounts. In my state (Illinois), we have some workforce development credits that are calculated based on wages paid, so the reduced wage expense from the ERC could affect those calculations too. Also, I've found it helpful to prepare a simple timeline document for each client showing: original return filed date, ERC claim filed date, ERC refund received date, and amendment filing date. This makes it crystal clear to the IRS that we're within the proper timeframe and helps support the correlative adjustment argument. Has anyone encountered situations where the client received partial ERC refunds over multiple dates? I have one client who got their 2020 ERC in two separate payments about a month apart, and I'm wondering if the 60-day clock starts from the first payment or if each payment gets its own 60-day window.

This thread has been incredibly helpful! I'm currently facing this same nightmare scenario with two of my S-corp clients who just received their 2020 ERC refunds - one for $28k and another for $51k. I've been losing sleep over this thinking we were completely out of luck with the 3-year amendment deadline having passed. The 60-day correlative adjustment rule is news to me, and honestly a huge relief. I'm definitely going to file the amended 1120-S and corresponding 1040-X returns ASAP. One additional consideration I wanted to mention - make sure to check if your client has any outstanding installment agreements or payment plans with the IRS. I had a situation last year where filing an amended return that increased tax liability affected an existing payment plan, and we had to contact the IRS to modify the agreement terms. Also, for anyone dealing with this, I'd recommend calculating the additional tax liability before filing so your client isn't surprised. The reduction in wage deduction flows through as additional taxable income on the K-1, which could push them into higher tax brackets or affect other deductions. Better to prepare them for the tax impact upfront than have an unhappy client later! Thanks everyone for sharing your experiences - this community is such a lifesaver for situations like these!