The Internal Revenue Service announced that it is opening a supplemental claim process to help third-party payers and their clients resolve incorrect claims for the Employee Retention Credit. Currently, third-party payers report and pay clients’ federal employment taxes under the third-party payer’s Employer Identification Number. Moreover, the IRS noted that some of these TPPs filed ERC claims for multiple employers, and that if a third-party payer’s client has since determined it is ineligible for the ERC and wants to resolve its claim, it is the third-party payer that needs to correct it.

The IRS’s supplemental claim process, which was announced on Sept. 27, lets a third-party payer that filed a prior claim with multiple clients “withdraw” only some clients while maintaining the claims of the qualifying clients. A supplemental claim is an adjusted employment tax return that allows a third-party payer to correct and/or consolidate previous claims that it filed on or before Jan. 31, 2024, if those claims have not yet been processed by the IRS. By filing a supplemental claim, the third-party payer is asking the IRS not to process outstanding adjusted employment tax returns for the tax period. The IRS will treat claims filed before the supplemental claim as if they were never filed.