References in Text
Section 7 of the Small Business Act, referred to in subsec. (h)(1)(A), (2), is classified to section 636 of Title 15, Commerce and Trade.
Section 7A of the Small Business Act, referred to in subsec. (h)(1)(A), (2), is classified to section 636m of Title 15, Commerce and Trade.
Section 324 of the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, referred to in subsec. (h)(1)(B), is classified to section 9009a of Title 15, Commerce and Trade.
Section 5003 of the American Rescue Plan Act of 2021, referred to in subsec. (h)(1)(C), is classified to section 9009c of Title 15, Commerce and Trade.
Amendments
2025—Subsec. (l). [Pub. L. 119–21] amended subsec. (l) generally. Prior to amendment, text read as follows: “Notwithstanding section 6501, the limitation on the time period for the assessment of any amount attributable to a credit claimed under this section shall not expire before the date that is 5 years after the later of—
“(1) the date on which the original return which includes the calendar quarter with respect to which such credit is determined is filed, or
“(2) the date on which such return is treated as filed under section 6501(b)(2).”
2021—Subsec. (c)(5)(C). [Pub. L. 117–58, § 80604(a)(1)], struck out subpar. (C) which read as follows: “which, with respect to such calendar quarter, is not described in subclause (I) or (II) of paragraph (2)(A)(ii).”.
Subsec. (n). [Pub. L. 117–58, § 80604(a)(2)], substituted “October 1, 2021 (or, in the case of wages paid by an eligible employer which is a recovery startup business, January 1, 2022)” for “January 1, 2022”.
Statutory Notes and Related Subsidiaries
Effective Date of 2025 Amendment
Amendment by [Pub. L. 119–21] applicable to assessments made after July 4, 2025, see [section 70605(g)(3) of Pub. L. 119–21], set out as an Enforcement Provisions With Respect to COVID-Related Employee Retention Credits note below.
Effective Date of 2021 Amendment
[Pub. L. 117–58, div. H, title VI, § 80604(b)], Nov. 15, 2021, [135 Stat. 1341], provided that: “The amendments made by this section [amending this section] shall apply to calendar quarters beginning after September 30, 2021.”
Effective Date
[Pub. L. 117–2, title IX, § 9651(d)], Mar. 11, 2021, [135 Stat. 182], provided that: “The amendments made by this section [enacting this section and amending section 1324 of Title 31, Money and Finance] shall apply to calendar quarters beginning after June 30, 2021.”
Enforcement Provisions With Respect to COVID-Related Employee Retention Credits
[Pub. L. 119–21, title VII, § 70605], July 4, 2025, [139 Stat. 286], provided that:“(a)
Assessable Penalty for Failure to Comply With Due Diligence Requirements.—
“(1)
In general.—
Any COVID–ERTC promoter which provides aid, assistance, or advice with respect to any COVID–ERTC document and which fails to comply with due diligence requirements imposed by the Secretary with respect to determining eligibility for, or the amount of, any credit or advance payment of a credit under section 3134 of the Internal Revenue Code of 1986, shall pay a penalty of $1,000 for each such failure.
“(2)
Due diligence requirements.—
The due diligence requirements referred to in paragraph (1) shall be similar to the due diligence requirements imposed under section 6695(g) of the Internal Revenue Code of 1986.
“(3)
Restriction to documents used in connection with returns or claims for refund.—
Paragraph (1) shall not apply with respect to any COVID–ERTC document unless such document constitutes, or relates to, a return or claim for refund.
“(4)
Treatment as assessable penalty, etc.—
For purposes of the Internal Revenue Code of 1986, the penalty imposed under paragraph (1) shall be treated as a penalty which is imposed under section 6695(g) of such Code and assessed under section 6201 of such Code.
“(5)
Secretary.—
For purposes of this subsection, the term ‘Secretary’ means the Secretary of the Treasury or the Secretary’s delegate.
“(b)
COVID–ERTC Promoter.—
For purposes of this section—
“(1)
In general.—
The term ‘COVID–ERTC promoter’ means, with respect to any COVID–ERTC document, any person which provides aid, assistance, or advice with respect to such document if—
“(A)
such person charges or receives a fee for such aid, assistance, or advice which is based on the amount of the refund or credit with respect to such document and, with respect to such person’s taxable year in which such person provided such assistance or the preceding taxable year, the aggregate of the gross receipts of such person for aid, assistance, and advice with respect to all COVID-ERTC documents exceeds 20 percent of the gross receipts of such person for such taxable year, or
“(B)
with respect to such person’s taxable year in which such person provided such assistance or the preceding taxable year—
“(i)
the aggregate of the gross receipts of such person for aid, assistance, and advice with respect to all COVID–ERTC documents exceeds 50 percent of the gross receipts of such person for such taxable year, or
“(ii)
both—
“(I)
such aggregate gross receipts exceed 20 percent of the gross receipts of such person for such taxable year, and
“(II)
the aggregate of the gross receipts of such person for aid, assistance, and advice with respect to all COVID–ERTC documents (determined after application of paragraph (3)) exceeds $500,000.
“(2)
Exception for certified professional employer organizations.—
The term ‘COVID–ERTC promoter’ shall not include a certified professional employer organization (as defined in section 7705 of the Internal Revenue Code of 1986).
“(3)
Aggregation rule.—
For purposes of paragraph (1), all persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986, or subsection (m) or (o) of section 414 of such Code, shall be treated as 1 person.
“(4)
Short taxable years.—
In the case of any taxable year of less than 12 months, a person shall be treated as a COVID-ERTC promoter if such person is described in paragraph (1) either with respect to such taxable year or by treating any reference to such taxable year as a reference to the calendar year in which such taxable year begins.
“(c)
COVID–ERTC Document.—
For purposes of this section, the term ‘COVID–ERTC document’ means any return, affidavit, claim, or other document related to any credit or advance payment of a credit under section 3134 of the Internal Revenue Code of 1986, including any document related to eligibility for, or the calculation or determination of any amount directly related to, any such credit or advance payment.
“(d)
Limitation on Credits and Refunds.—
Notwithstanding section 6511 of the Internal Revenue Code of 1986, no credit under section 3134 of the Internal Revenue Code of 1986 shall be allowed, and no refund with respect to any such credit shall be made, after the date of the enactment of this Act [July 4, 2025], unless a claim for such credit or refund was filed by the taxpayer on or before January 31, 2024.
“(e)
Extension of Limitation on Assessment.—
“(f)
Amendment to Penalty for Erroneous Claim for Refund or Credit.—
“(g)
Effective Dates.—
“(1)
In general.—
The provisions of this section shall apply to aid, assistance, and advice provided after the date of the enactment of this Act [July 4, 2025].
“(2)
Limitation on credits and refunds.—
Subsection (d) shall apply to credits and refunds allowed or made after the date of the enactment of this Act.
“(3)
Extension of limitation on assessment.—
The amendment made by subsection (e) shall apply to assessments made after the date of the enactment of this Act.
“(4)
Amendment to penalty for erroneous claim for refund or credit.—
The amendment made by subsection (f) shall apply to claims for credit or refund after the date of the enactment of this Act.
“(h)
Regulations.—
The Secretary (as defined in subsection (a)(5)) shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section (and the amendments made by this section).”