ERC Credit Refund

[rwm221]

I have a client with a partnership and has ERC Credit Refund. It says it goes on line 34 of the k-1, but I don't see a line 34. Where does it go?

Thank You

[TaxGuyBill]

Can you clarify what EXACTLY you mean by "ERC Credit Refund"?

Did the Partnership receive money, due to claiming the ERC?

[rwm221]

It is a credit refund

[terryats]

ERC is an employment tax credit, and should be reported on the 1065 K1 box 20 code AH. you should also attach a statement showing what year the adjustment was for, and the corrected profit/loss which may require partner to amend that year.

[TaxGuyBill]

It is a credit refund

That didn't really clarify anything.

If the Partnership received a refund due to claiming the Employee Retention credit, the Partnership would amend the year that received the credit to reduce wages. In turn, the Partners would amend their 1040s due to the amended K-1s.

If all returns were timely filed, is likely past the statute of limitations, in which case no additional tax can be assessed.

There is a non-authoritative FAQ says on some random IRS page that says it can be added to the current year return, but that has no authority. In my opinion they didn't publish it in the IRB because it is completely nonsensical and ridiculous.

Any interest that was earned is reported as income on the tax return that the interest was received.