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Employee Retention Credit Alert Reference Hub

With TaxNow, you gain access to real-time notifications of all changes to your IRS tax account. These alerts keep you informed and in control, ensuring you stay up-to-date on any updates. While all alerts are important, we understand that those concerning your Employee Retention Credit (ERC) are likely of particular interest to you. Here’s some helpful information to make sure you know what to be on the lookout for regarding your ERC.

Data

Within the Data section of TaxNow, you can review the historical transaction history within your employment tax account.
Toggle the default view from “Income” to “Employment”
Using the “Select Period” dropdown, toggle to either 2020 or 2021 (depending on what year you are viewing).
From there, you will see all relevant transactions in the year on your payroll tax account, which may include both ERC and non-ERC related events.  You may also wish to toggle to “Debit” in the header to look for any transactions indicating “Refund issued.” If there are no amounts indicated as “Refund issued,” then your ERC has not been processed.
Refer to the section below “Alerts Potentially Relevant to Your ERC,” for certain types of transaction you should be on the lookout for!
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Alerts

The “Alerts” tool will display all transactions on your income and payroll tax account that occur on or after that date your TaxNow account went “live” with the IRS. Hence, if there is a new ERC related transaction that occurs after that date, you will see it in the Alerts section, as well as the Data section (while all transactions occurring prior to your “account live” date will only be present within the Data tool). Please note that you may receive frequent alerts associated with payroll tax deposits (Code 650), that are unrelated to your ERC.
*ERC related Alerts will typically indicate a Tax Period between ‘2020 Q2’ and ‘2021 Q4’ under Form 941

Documents

The “Documents” tool will allow you to pull real-time employment tax transcripts to review the activity on your account.
Select “Request New Transcript”
Choose "Tax Account Transcript" (ACTR)
Select Tax Period "2020" and/or "2021" (depending on which year you are reviewing)
Select "Form 941"
Select "Request New Transcript"
Once your transcripts have been downloaded, you can download a copy and review for ERC-related activity. Refer to the section below “Alerts Potentially Relevant to Your ERC,” for certain types of transaction you should be on the lookout for!

Tax History

Any processed refund will typically be present within your Tax History tool. Ensure you have toggled from the Income to Employment View and then select the drop down to show the full 2021 or 2020 per quarter history.
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Data/Alerts Potentially Relevant to Your ERC:

Code 971 Amended Tax Return or Claimed Forwarded for Processing
The date the IRS recorded the receipt of your Form 941-X to claim the ERC.
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ERC Insight: The IRS typically takes anywhere from two (2) to four (4) months to update this date on your account transcript.
Code 291, Reduced or Removed Prior Tax Assessed
The amount of non-refundable credits that have been processed for the quarter
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ERC Insight: The date for this Code will typically be the same as your refund processing date
Code 846, Refund Issued
The IRS has issued you a refund.
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ERC Insight: In most cases, this will be the total of Code 291 (Non-Refundable Credit), Code 766 (Refundable Credit), and Code 776 (Interest), assuming no penalties or transfers have occurred.
Code 960, Appointed Representative
The IRS has accepted TaxNow or another third party as an authorized viewer or representative on the indicated tax form and period.
Code 976, Duplicate Return Filed
Similar to Code 971, this indicates that the IRS received a Form 941-X.
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ERC Insight: Generally, you only see either Code 971 or 976, but occasionally the IRS will record both Codes.
Code 766, Hire Credit (or Employer Credit due to COVID-19)
The number of refundable credits that have been processed for that quarter.
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ERC Insight: The date for this Code will typically be the same as your refund processing date.
Code 290, Additional Tax Assessed
An additional tax has been assessed. The IRS will issue correspondence concerning the changes to your account.

ERC Insight: The IRS has utilized Code 290 with a $0.00 amount to indicate a variety of non-standard correspondence or actions related to the ERC. Typically, there is no material significance to this alert and no additional action is required by an ERC claimant. Please monitor your mailbox for any written correspondence from the IRS.  

Critical Codes to Monitor

Code 420 - Examination / Audit Initiated
Indicates that your return was reviewed and has been referred to the Examination or Appeals Division.
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ERC Insight: While an examination is pending, the IRS will not process any refunds until it has been finalized.
Code 424 - Potential Examination / Audit
Indicates that your return was reviewed and an examination was requested.
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ERC Insight: While an examination is pending, the IRS will not process any refunds until it has been finalized.

Frequently Occurring Codes

Although these codes aren’t related to your ERC, here are the ones you will see the most often as they are tied to routine tax activity.
Code 650, Federal Tax Deposit
These are tax deposits that you made over the respective quarter(s) towards your payroll tax liability.
Code 150, Tax Return Filed
The date your original Form 941 was filed.