Hello @MattKing that's a great question.
As this credit can be taken against the employer's share of Social Security taxes. It's a fully refundable credit that can be claimed on Form 941. Form 7200 may be used to request an advance payment of employer credits if the employer's share of Social Security taxes isn't high enough to immediately use the entire credit amount.
The Employee Retention Credit (ERC) is not taxable income; however the ERC will affect what payroll deductions you can claim. If you received the ERC you must reduce your payroll expense deduction by the amount of the credit. If you file Form 941-X to claim the Employee Retention Credit, you must reduce your deduction for wages by the amount of the credit for that same tax period. Therefore, you may need to amend your income tax return (for example, Forms 1040, 1065, 1120, etc.) to reflect that reduced deduction.
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