If, for example, you received a $100,000 employee retention credit (ERC) refund in 2026 for wages you paid in 2020 and 2021, you already know the IRS’s position: report the $100,000 as income on your 2026 return.
In our July article, we gave you a two-step strategy: follow the IRS guidance and report the income, then file a protective refund claim so you can get the tax back if the courts later reject the IRS’s position.
This article is about why the courts might do exactly that. The reason has a name: Twitchco.
Quick Refresher: What the IRS Wants
The law never allowed a double benefit.
When you claimed the ERC, you were required to reduce your 2020 and 2021 wage deductions by the amount of the credit—in those years. Many businesses didn’t, and by the time the refund checks arrived in 2026, the statute of limitations had closed ... Log in to view full article.
