Seaside CPA wrote:So if clients choose not to amend, what is the statute on this? Is it three or five years from the date of filing the 941X?
Yes. If I remember correctly, I believe the 5-year statute was added only for the last round of ERC expansions, i.e., for Q3 & Q4 2021. I think the 3-year statute would apply to the other quarters (same statute as a regular 941).
Seaside CPA wrote:Would worst case scenario be they have to pay back the money plus interest? Or would there be some sort of penalty involved?
Right - tax, interest, and late payment penalty.
Of course, you have to be consistent and reduce your wage deduction on the income tax return if you don't amend the 941 - and you also should be able to claim the full wage deduction on the income tax return if you do amend the 941 to get rid of the credit.