Regulations: Recapture of excess employment tax credits under the “American Rescue Plan Act” (COVID-19)

Assessment of any erroneous refund of the tax credits paid under sections 3131, 3132, and 3134

Assessment of any erroneous refund of the tax credits paid

The U.S. Treasury Department and IRS this afternoon released for publication in the Federal Register temporary regulations (T.D. 9953) and, by cross-reference, proposed regulations (REG-109077-21) under sections 3131, 3132, and 3134 of the Code, added by sections 9641 and 9651 of the “American Rescue Plan Act of 2021” (Pub. L. No. 117-2, enacted March 11, 2021).

  • The temporary regulations [PDF 287 KB] (as published in the Federal Register on September 10, 2021) authorize the assessment of any erroneous refund of the tax credits paid under sections 3131, 3132 (including any increases in those credits under section 3133), and 3134.
  • The proposed regulations [PDF 239 KB] (as published in the Federal Register on September 10, 2021) affect businesses and tax-exempt organizations, as well as certain governmental entities, that claim the paid sick leave credit and the paid family leave credit under sections 3131 and 3132, respectively, and that claim the employee retention credit under section 3134. The text of the temporary regulations serves as the text of these proposed regulations.

The purpose of this report is to provide text of the regulations.

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.