The Internal Revenue Service (IRS) has issued guidance for employers regarding the retroactive termination of the Employee Retention Tax Credit (ERTC). As you know, when it was first introduced as a part of the CARES Act back in 2020, the ERTC applied only to 2020 as it was scheduled to sunset on December 31, 2020. Just a few days before however, President Trump signed another COVID stimulus bill that extended the program for another year, through December 31, 2021. Yet another stimulus bill coming out of Congress, the bipartisan Infrastructure Investment and Jobs Act, then proposed eliminating the program entirely on September 30, 2021. With the signing of that legislation by President Biden in the middle of November, the ERTC was retroactively terminated. The IRS guidance clarifies the steps eligible employers should take if they paid wages after September 30, received an advance payment of the ERTC for those wages or reduced employment tax deposits in anticipation of the Q4 credit ERTC and are now ineligible due to the complete elimination of the program. Under those circumstances, employers will not be subject to a failure to deposit penalty with respect to the retained deposits, but the entire tax liability due after the program expired on September 30 must still be remitted.