---
kind: "section"
citation: "26 U.S.C. § 3134"
title: "26"
title_heading: "Internal Revenue Code"
number: "3134"
heading: "Employee retention credit for employers subject to closure due to COVID–19"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/3134"
units:
  - "Subtitle C — Employment Taxes"
  - "Chapter 21 — Federal Insurance Contributions Act"
  - "Subchapter D — Credits"
---

# §3134. Employee retention credit for employers subject to closure due to COVID–19

- (a) **In general—** In the case of an eligible [employer](/usc/26/3231.md?p=a), there shall be allowed as a credit against applicable [employment](/usc/26/3121.md?p=b) taxes for each calendar quarter an amount equal to 70 percent of the qualified [wages](/usc/26/3121.md?p=a) with respect to each [employee](/usc/26/3121.md?p=d) of such [employer](/usc/26/3231.md?p=a) for such calendar quarter.
- (b) **Limitations and refundability—**
  - (1) **In general—**
    - (A) **Wages taken into account—** The amount of qualified [wages](/usc/26/3121.md?p=a) with respect to any [employee](/usc/26/3121.md?p=d) which may be taken into account under [subsection (a)](#a) by the eligible [employer](/usc/26/3231.md?p=a) for any calendar quarter shall not exceed $10,000.
    - (B) **Recovery startup businesses—** In the case of an eligible [employer](/usc/26/3231.md?p=a) which is a recovery startup business (as defined in [subsection (c)(5)](#c-5)), the amount of the credit allowed under [subsection (a)](#a) (after application of [subparagraph (A)](#b-1-A)) for any calendar quarter shall not exceed $50,000.
  - (2) **Credit limited to employment taxes—** The credit allowed by [subsection (a)](#a) with respect to any calendar quarter shall not exceed the applicable [employment](/usc/26/3121.md?p=b) taxes (reduced by any credits allowed under sections [3131](/usc/26/3131.md) and [3132](/usc/26/3132.md)) on the [wages](/usc/26/3121.md?p=a) paid with respect to the [employment](/usc/26/3121.md?p=b) of all the [employees](/usc/26/3121.md?p=d) of the eligible [employer](/usc/26/3231.md?p=a) for such calendar quarter.
  - (3) **Refundability of excess credit—** If the amount of the credit under [subsection (a)](#a) exceeds the limitation of [paragraph (2)](#b-2) for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections [6402(a)](/usc/26/6402.md?p=a) and [6413(b)](/usc/26/6413.md?p=b).
- (c) **Definitions—** For purposes of this section—
  - (1) **Applicable employment taxes—** The term “applicable [employment](/usc/26/3121.md?p=b) taxes” means the following:
    - (A) The taxes imposed under [section 3111(b)](/usc/26/3111.md?p=b).
    - (B) So much of the taxes imposed under [section 3221(a)](/usc/26/3221.md?p=a) as are attributable to the rate in effect under [section 3111(b)](/usc/26/3111.md?p=b).
  - (2) **Eligible employer—**
    - (A) **In general—** The term “eligible [employer](/usc/26/3231.md?p=a)” means any [employer](/usc/26/3231.md?p=a)—
      - (i) which was carrying on a trade or business during the calendar quarter for which the credit is determined under [subsection (a)](#a), and
      - (ii) with respect to any calendar quarter, for which—
        - (I) the operation of the trade or business described in [clause (i)](#c-2-A-i) is fully or partially suspended during the calendar quarter due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to the coronavirus disease 2019 (COVID–19),
        - (II) the gross receipts (within the meaning of [section 448(c)](/usc/26/448.md?p=c)) of such [employer](/usc/26/3231.md?p=a) for such calendar quarter are less than 80 percent of the gross receipts of such [employer](/usc/26/3231.md?p=a) for the same calendar quarter in calendar year 2019, or
        - (III) the [employer](/usc/26/3231.md?p=a) is a recovery startup business (as defined in [paragraph (5)](#c-5)).

      With respect to any [employer](/usc/26/3231.md?p=a) for any calendar quarter, if such [employer](/usc/26/3231.md?p=a) was not in existence as of the beginning of the same calendar quarter in calendar year 2019, [clause (ii)(II)](#c-2-A-ii-II) shall be applied by substituting “2020” for “2019”.

    - (B) **Election to use alternative quarter—** At the election of the [employer](/usc/26/3231.md?p=a)—
      - (i) [subparagraph (A)(ii)(II)](#c-2-A-ii-II) shall be applied—
        - (I) by substituting “for the immediately preceding calendar quarter” for “for such calendar quarter”, and
        - (II) by substituting “the corresponding calendar quarter in calendar year 2019” for “the same calendar quarter in calendar year 2019”, and
      - (ii) the last sentence of [subparagraph (A)](#c-2-A) shall be applied by substituting “the corresponding calendar quarter in calendar year 2019” for “the same calendar quarter in calendar year 2019”.

      An election under this subparagraph shall be made at such time and in such manner as the Secretary shall prescribe.

    - (C) **Tax-exempt organizations—** In the case of an organization which is described in [section 501(c)](/usc/26/501.md?p=c) and exempt from tax under [section 501(a)](/usc/26/501.md?p=a)—
      - (i) clauses [(i)](#c-2-A-i) and [(ii)(I)](#c-2-A-ii-I) of subparagraph (A) shall apply to all operations of such organization, and
      - (ii) any reference in this section to gross receipts shall be treated as a reference to gross receipts within the meaning of section 6033.
  - (3) **Qualified wages—**
    - (A) **In general—** The term “qualified [wages](/usc/26/3121.md?p=a)” means—
      - (i) in the case of an eligible [employer](/usc/26/3231.md?p=a) for which the average number of full-time [employees](/usc/26/3121.md?p=d) (within the meaning of [section 4980H](/usc/26/4980H.md)) employed by such eligible [employer](/usc/26/3231.md?p=a) during 2019 was greater than 500, [wages](/usc/26/3121.md?p=a) paid by such eligible [employer](/usc/26/3231.md?p=a) with respect to which an [employee](/usc/26/3121.md?p=d) is not providing [services](/usc/26/3231.md?p=e-2-C-i) due to circumstances described in subclause [(I)](#c-2-A-ii-I) or [(II)](#c-2-A-ii-II) of paragraph (2)(A)(ii), or
      - (ii) in the case of an eligible [employer](/usc/26/3231.md?p=a) for which the average number of full-time [employees](/usc/26/3121.md?p=d) (within the meaning of [section 4980H](/usc/26/4980H.md)) employed by such eligible [employer](/usc/26/3231.md?p=a) during 2019 was not greater than 500—
        - (I) with respect to an eligible [employer](/usc/26/3231.md?p=a) described in [subclause (I)](#c-2-A-ii-I) of paragraph (2)(A)(ii), [wages](/usc/26/3121.md?p=a) paid by such eligible [employer](/usc/26/3231.md?p=a) with respect to an [employee](/usc/26/3121.md?p=d) during any period described in such clause, or
        - (II) with respect to an eligible [employer](/usc/26/3231.md?p=a) described in [subclause (II)](#c-3-A-ii-II) of such paragraph, [wages](/usc/26/3121.md?p=a) paid by such eligible [employer](/usc/26/3231.md?p=a) with respect to an [employee](/usc/26/3121.md?p=d) during such quarter.
    - (B) **Special rule for employers not in existence in 2019—** In the case of any [employer](/usc/26/3231.md?p=a) that was not in existence in 2019, [subparagraph (A)](#c-3-A) shall be applied by substituting “2020” for “2019” each place it appears.
    - (C) **Severely financially distressed employers—**
      - (i) **In general—** Notwithstanding [subparagraph (A)(i)](#c-3-A-i), in the case of a severely financially distressed [employer](/usc/26/3231.md?p=a), the term “qualified [wages](/usc/26/3121.md?p=a)” means [wages](/usc/26/3121.md?p=a) paid by such [employer](/usc/26/3231.md?p=a) with respect to an [employee](/usc/26/3121.md?p=d) during any calendar quarter.
      - (ii) **Definition—** The term “severely financially distressed [employer](/usc/26/3231.md?p=a)” means an eligible [employer](/usc/26/3231.md?p=a) as defined in [paragraph (2)](#c-2), determined by substituting “less than 10 percent” for “less than 80 percent” in [subparagraph (A)(ii)(II)](#c-3-A-ii-II) thereof.
    - (D) **Exception—** The term “qualified [wages](/usc/26/3121.md?p=a)” shall not include any [wages](/usc/26/3121.md?p=a) taken into account under sections [41](/usc/26/41.md), [45A](/usc/26/45A.md), [45P](/usc/26/45P.md), [45S](/usc/26/45S.md), [51](/usc/26/51.md), [1396](/usc/26/1396.md), [3131](/usc/26/3131.md), and 3132.
  - (4) **Wages—**
    - (A) **In general—** The term “[wages](/usc/26/3121.md?p=a)” means [wages](/usc/26/3121.md?p=a) (as defined in [section 3121(a)](/usc/26/3121.md?p=a)) and [compensation](/usc/26/3231.md?p=e-1) (as defined in [section 3231(e)](/usc/26/3231.md?p=e)). For purposes of the preceding sentence, in the case of any organization or entity described in [subsection (f)(2)](#f-2), [wages](/usc/26/3121.md?p=a) as defined in [section 3121(a)](/usc/26/3121.md?p=a) shall be determined without regard to paragraphs [(5)](/usc/26/3121.md?p=b-5), [(6)](/usc/26/3121.md?p=b-6), [(7)](/usc/26/3121.md?p=b-7), [(10)](/usc/26/3121.md?p=b-10), and [(13)](/usc/26/3121.md?p=b-13) of section 3121(b) (except with respect to [services](/usc/26/3231.md?p=e-2-C-i) performed in a penal institution by an inmate thereof).
    - (B) **Allowance for certain health plan expenses—**
      - (i) **In general—** Such term shall include amounts paid by the eligible [employer](/usc/26/3231.md?p=a) to provide and maintain a group health plan (as defined in [section 5000(b)(1)](/usc/26/5000.md?p=b-1)), but only to the extent that such amounts are excluded from the gross income of [employees](/usc/26/3121.md?p=d) by reason of [section 106(a)](/usc/26/106.md?p=a).
      - (ii) **Allocation rules—** For purposes of this section, amounts treated as [wages](/usc/26/3121.md?p=a) under [clause (i)](#c-4-B-i) shall be treated as paid with respect to any [employee](/usc/26/3121.md?p=d) (and with respect to any period) to the extent that such amounts are properly allocable to such [employee](/usc/26/3121.md?p=d) (and to such period) in such manner as the Secretary may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among periods of coverage.
  - (5) **Recovery startup business—** The term “recovery startup business” means any [employer](/usc/26/3231.md?p=a)—
    - (A) which began carrying on any trade or business after February 15, 2020, and
    - (B) for which the average annual gross receipts of such [employer](/usc/26/3231.md?p=a) (as determined under rules similar to the rules under [section 448(c)(3)](/usc/26/448.md?p=c-3)) for the 3-taxable-year period ending with the taxable year which precedes the calendar quarter for which the credit is determined under [subsection (a)](#a) does not exceed $1,000,000.
  - (6) **Other terms—** Any term used in this section which is also used in this chapter or [chapter 22](/usc/26/chstC/ch22.md) shall have the same meaning as when used in such chapter.
- (d) **Aggregation rule—** All persons treated as a single [employer](/usc/26/3231.md?p=a) under subsection [(a)](/usc/26/52.md?p=a) or [(b)](/usc/26/52.md?p=b) of section 52, or subsection [(m)](/usc/26/414.md?p=m) or [(o)](/usc/26/414.md?p=o) of section 414, shall be treated as one [employer](/usc/26/3231.md?p=a) for purposes of this section.
- (e) **Certain rules to apply—** For purposes of this section, rules similar to the rules of sections [51(i)(1)](/usc/26/51.md?p=i-1) and [280C(a)](/usc/26/280C.md?p=a) shall apply.
- (f) **Certain governmental employers—**
  - (1) **In general—** This credit shall not apply to the Government of the [United States](/usc/26/3121.md?p=e-2), the government of any [State](/usc/26/3121.md?p=e-1) or [political subdivision](/usc/26/3121.md?p=j-4-C) thereof, or any agency or instrumentality of any of the foregoing.
  - (2) **Exception—** [Paragraph (1)](#f-1) shall not apply to—
    - (A) any organization described in [section 501(c)(1)](/usc/26/501.md?p=c-1) and exempt from tax under [section 501(a)](/usc/26/501.md?p=a), or
    - (B) any entity described in [paragraph (1)](#f-1) if—
      - (i) such entity is a college or university, or
      - (ii) the principal purpose or function of such entity is providing medical or hospital care.

      In the case of any entity described in [subparagraph (B)](#f-2-B), such entity shall be treated as satisfying the requirements of [subsection (c)(2)(A)(i)](#c-2-A-i).

- (g) **Election to not take certain wages into account—** This section shall not apply to so much of the qualified [wages](/usc/26/3121.md?p=a) paid by an eligible [employer](/usc/26/3231.md?p=a) as such [employer](/usc/26/3231.md?p=a) elects (at such time and in such manner as the Secretary may prescribe) to not take into account for purposes of this section.
- (h) **Coordination with certain programs—**
  - (1) **In general—** This section shall not apply to so much of the qualified [wages](/usc/26/3121.md?p=a) paid by an eligible [employer](/usc/26/3231.md?p=a) as are taken into account as payroll costs in connection with—
    - (A) a covered loan under section 7(a)(37) or 7A of the Small Business Act,
    - (B) a grant under section 324 of the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, or
    - (C) a restaurant revitalization grant under section 5003 of the American Rescue Plan Act of 2021.
  - (2) **Application where PPP loans not forgiven—** The Secretary shall issue guidance providing that payroll costs paid during the covered period shall not fail to be treated as qualified [wages](/usc/26/3121.md?p=a) under this section by reason of [paragraph (1)](#h-1) to the extent that—
    - (A) a covered loan of the taxpayer under section 7(a)(37) of the Small Business Act is not forgiven by reason of a decision under section 7(a)(37)(J) of such Act, or
    - (B) a covered loan of the taxpayer under section 7A of the Small Business Act is not forgiven by reason of a decision under section 7A(g) of such Act.

    Terms used in the preceding sentence which are also used in section 7A(g) or 7(a)(37)(J) of the Small Business Act shall, when applied in connection with either such section, have the same meaning as when used in such section, respectively.

- (i) **Third party payors—** Any credit allowed under this section shall be treated as a credit described in [section 3511(d)(2)](/usc/26/3511.md?p=d-2).
- (j) **Advance payments—**
  - (1) **In general—** Except as provided in [paragraph (2)](#j-2), no advance payment of the credit under [subsection (a)](#a) shall be allowed.
  - (2) **Advance payments to small employers—**
    - (A) **In general—** Under rules provided by the Secretary, an eligible [employer](/usc/26/3231.md?p=a) for which the average number of full-time [employees](/usc/26/3121.md?p=d) (within the meaning of [section 4980H](/usc/26/4980H.md)) employed by such eligible [employer](/usc/26/3231.md?p=a) during 2019 was not greater than 500 may elect for any calendar quarter to receive an advance payment of the credit under [subsection (a)](#a) for such quarter in an amount not to exceed 70 percent of the average quarterly [wages](/usc/26/3121.md?p=a) paid by the [employer](/usc/26/3231.md?p=a) in calendar year 2019.
    - (B) **Special rule for seasonal employers—** In the case of any [employer](/usc/26/3231.md?p=a) who employs seasonal workers (as defined in [section 45R(d)(5)(B)](/usc/26/45R.md?p=d-5-B)), the [employer](/usc/26/3231.md?p=a) may elect to apply [subparagraph (A)](#j-2-A) by substituting “the [wages](/usc/26/3121.md?p=a) for the calendar quarter in 2019 which corresponds to the calendar quarter to which the election relates” for “the average quarterly [wages](/usc/26/3121.md?p=a) paid by the [employer](/usc/26/3231.md?p=a) in calendar year 2019”.
    - (C) **Special rule for employers not in existence in 2019—** In the case of any [employer](/usc/26/3231.md?p=a) that was not in existence in 2019, subparagraphs [(A)](#j-2-A) and [(B)](#j-2-B) shall each be applied by substituting “2020” for “2019” each place it appears.
  - (3) **Reconciliation of credit with advance payments—**
    - (A) **In general—** The amount of credit which would (but for this subsection) be allowed under this section shall be reduced (but not below zero) by the aggregate payment allowed to the taxpayer under [paragraph (2)](#j-2). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to [section 6213(b)(1)](/usc/26/6213.md?p=b-1).
    - (B) **Excess advance payments—** If the advance payments to a taxpayer under [paragraph (2)](#j-2) for a calendar quarter exceed the credit allowed by this section (determined without regard to [subparagraph (A)](#j-3-A)), the tax imposed under [section 3111(b)](/usc/26/3111.md?p=b) or so much of the tax imposed under [section 3221(a)](/usc/26/3221.md?p=a) as is attributable to the rate in effect under [section 3111(b)](/usc/26/3111.md?p=b) (whichever is applicable) for the calendar quarter shall be increased by the amount of such excess.
- (k) **Treatment of deposits—** The Secretary shall waive any penalty under [section 6656](/usc/26/6656.md) for any failure to make a deposit of any applicable [employment](/usc/26/3121.md?p=b) taxes if the Secretary determines that such failure was due to the reasonable anticipation of the credit allowed under this section.
- (l) **Extension of limitation on assessment—**
  - (1) **In general—** Notwithstanding [section 6501](/usc/26/6501.md), the limitation on the time period for the assessment of any amount attributable to a credit claimed under this section shall not expire before the date that is 6 years after the latest of—
    - (A) the date on which the original return which includes the calendar quarter with respect to which such credit is determined is filed,
    - (B) the date on which such return is treated as filed under [section 6501(b)(2)](/usc/26/6501.md?p=b-2), or
    - (C) the date on which the claim for credit or refund with respect to such credit is made.
  - (2) **Deduction for wages taken into account in determining improperly claimed credit—**
    - (A) **In general—** Notwithstanding [section 6511](/usc/26/6511.md), in the case of an assessment attributable to a credit claimed under this section, the limitation on the time period for credit or refund of any amount attributable to a deduction for improperly claimed ERTC [wages](/usc/26/3121.md?p=a) shall not expire before the time period for such assessment expires under [paragraph (1)](#l-1).
    - (B) **Improperly claimed ERTC wages—** For purposes of this paragraph, the term “improperly claimed ERTC [wages](/usc/26/3121.md?p=a)” means, with respect to an assessment attributable to a credit claimed under this section, the [wages](/usc/26/3121.md?p=a) with respect to which a deduction would not have been allowed if the portion of the credit to which such assessment relates had been properly claimed.
- (m) **Regulations and guidance—** The Secretary shall issue such forms, instructions, regulations, and other guidance as are necessary—
  - (1) to allow the advance payment of the credit under [subsection (a)](#a) as provided in [subsection (j)(2)](#j-2), subject to the limitations provided in this section, based on such information as the Secretary shall require,
  - (2) with respect to the application of the credit under [subsection (a)](#a) to third party payors (including professional [employer](/usc/26/3231.md?p=a) organizations, certified professional [employer](/usc/26/3231.md?p=a) organizations, or agents under [section 3504](/usc/26/3504.md)), including regulations or guidance allowing such payors to submit documentation necessary to substantiate the eligible [employer](/usc/26/3231.md?p=a) status of [employers](/usc/26/3231.md?p=a) that use such payors, and
  - (3) to prevent the avoidance of the purposes of the limitations under this section, including through the leaseback of [employees](/usc/26/3121.md?p=d).

  Any forms, instructions, regulations, or other guidance described in [paragraph (2)](#m-2) shall require the customer to be responsible for the accounting of the credit and for any liability for improperly claimed credits and shall require the certified professional [employer](/usc/26/3231.md?p=a) organization or other third party payor to accurately report such tax credits based on the information provided by the customer.

- (n) **Application—** This section shall only apply to [wages](/usc/26/3121.md?p=a) paid after June 30, 2021, and before October 1, 2021 (or, in the case of [wages](/usc/26/3121.md?p=a) paid by an eligible [employer](/usc/26/3231.md?p=a) which is a recovery startup business, January 1, 2022).

## Source credit

(Added Pub. L. 117–2, title IX, § 9651(a), Mar. 11, 2021, 135 Stat. 177; amended Pub. L. 117–58, div. H, title VI, § 80604(a), Nov. 15, 2021, 135 Stat. 1341; Pub. L. 119–21, title VII, § 70605(e), July 4, 2025, 139 Stat. 288.)

## Notes

### Editorial Notes

### References in Text

Section 7 of the Small Business Act, referred to in subsec. (h)(1)(A), (2), is classified to section 636 of Title 15, Commerce and Trade.

Section 7A of the Small Business Act, referred to in subsec. (h)(1)(A), (2), is classified to section 636m of Title 15, Commerce and Trade.

Section 324 of the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, referred to in subsec. (h)(1)(B), is classified to section 9009a of Title 15, Commerce and Trade.

Section 5003 of the American Rescue Plan Act of 2021, referred to in subsec. (h)(1)(C), is classified to section 9009c of Title 15, Commerce and Trade.

### Amendments

2025—Subsec. (l). Pub. L. 119–21 amended subsec. (l) generally. Prior to amendment, text read as follows: “Notwithstanding section 6501, the limitation on the time period for the assessment of any amount attributable to a credit claimed under this section shall not expire before the date that is 5 years after the later of—

“(1) the date on which the original return which includes the calendar quarter with respect to which such credit is determined is filed, or

“(2) the date on which such return is treated as filed under section 6501(b)(2).”

2021—Subsec. (c)(5)(C). Pub. L. 117–58, § 80604(a)(1), struck out subpar. (C) which read as follows: “which, with respect to such calendar quarter, is not described in subclause (I) or (II) of paragraph (2)(A)(ii).”.

Subsec. (n). Pub. L. 117–58, § 80604(a)(2), substituted “October 1, 2021 (or, in the case of wages paid by an eligible employer which is a recovery startup business, January 1, 2022)” for “January 1, 2022”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2025 Amendment

Amendment by Pub. L. 119–21 applicable to assessments made after July 4, 2025, see section 70605(g)(3) of Pub. L. 119–21, set out as an Enforcement Provisions With Respect to COVID-Related Employee Retention Credits note below.

### Effective Date of 2021 Amendment

Pub. L. 117–58, div. H, title VI, § 80604(b), Nov. 15, 2021, 135 Stat. 1341, provided that: “The amendments made by this section [amending this section] shall apply to calendar quarters beginning after September 30, 2021.”

### Effective Date

Pub. L. 117–2, title IX, § 9651(d), Mar. 11, 2021, 135 Stat. 182, provided that: “The amendments made by this section [enacting this section and amending section 1324 of Title 31, Money and Finance] shall apply to calendar quarters beginning after June 30, 2021.”

### Enforcement Provisions With Respect to COVID-Related Employee Retention Credits

Pub. L. 119–21, title VII, § 70605, July 4, 2025, 139 Stat. 286, provided that:Assessable Penalty for Failure to Comply With Due Diligence Requirements.— In general.—Any COVID–ERTC promoter which provides aid, assistance, or advice with respect to any COVID–ERTC document and which fails to comply with due diligence requirements imposed by the Secretary with respect to determining eligibility for, or the amount of, any credit or advance payment of a credit under section 3134 of the Internal Revenue Code of 1986, shall pay a penalty of $1,000 for each such failure. Due diligence requirements.—The due diligence requirements referred to in paragraph (1) shall be similar to the due diligence requirements imposed under section 6695(g) of the Internal Revenue Code of 1986. Restriction to documents used in connection with returns or claims for refund.—Paragraph (1) shall not apply with respect to any COVID–ERTC document unless such document constitutes, or relates to, a return or claim for refund. Treatment as assessable penalty, etc.—For purposes of the Internal Revenue Code of 1986, the penalty imposed under paragraph (1) shall be treated as a penalty which is imposed under section 6695(g) of such Code and assessed under section 6201 of such Code. Secretary.—For purposes of this subsection, the term ‘Secretary’ means the Secretary of the Treasury or the Secretary’s delegate. COVID–ERTC Promoter.—For purposes of this section— In general.—The term ‘COVID–ERTC promoter’ means, with respect to any COVID–ERTC document, any person which provides aid, assistance, or advice with respect to such document if— such person charges or receives a fee for such aid, assistance, or advice which is based on the amount of the refund or credit with respect to such document and, with respect to such person’s taxable year in which such person provided such assistance or the preceding taxable year, the aggregate of the gross receipts of such person for aid, assistance, and advice with respect to all COVID-ERTC documents exceeds 20 percent of the gross receipts of such person for such taxable year, or with respect to such person’s taxable year in which such person provided such assistance or the preceding taxable year— the aggregate of the gross receipts of such person for aid, assistance, and advice with respect to all COVID–ERTC documents exceeds 50 percent of the gross receipts of such person for such taxable year, or both— such aggregate gross receipts exceed 20 percent of the gross receipts of such person for such taxable year, and the aggregate of the gross receipts of such person for aid, assistance, and advice with respect to all COVID–ERTC documents (determined after application of paragraph (3)) exceeds $500,000. Exception for certified professional employer organizations.—The term ‘COVID–ERTC promoter’ shall not include a certified professional employer organization (as defined in section 7705 of the Internal Revenue Code of 1986). Aggregation rule.—For purposes of paragraph (1), all persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986, or subsection (m) or (o) of section 414 of such Code, shall be treated as 1 person. Short taxable years.—In the case of any taxable year of less than 12 months, a person shall be treated as a COVID-ERTC promoter if such person is described in paragraph (1) either with respect to such taxable year or by treating any reference to such taxable year as a reference to the calendar year in which such taxable year begins. COVID–ERTC Document.—For purposes of this section, the term ‘COVID–ERTC document’ means any return, affidavit, claim, or other document related to any credit or advance payment of a credit under section 3134 of the Internal Revenue Code of 1986, including any document related to eligibility for, or the calculation or determination of any amount directly related to, any such credit or advance payment. Limitation on Credits and Refunds.—Notwithstanding section 6511 of the Internal Revenue Code of 1986, no credit under section 3134 of the Internal Revenue Code of 1986 shall be allowed, and no refund with respect to any such credit shall be made, after the date of the enactment of this Act [July 4, 2025], unless a claim for such credit or refund was filed by the taxpayer on or before January 31, 2024. Extension of Limitation on Assessment.— Amendment to Penalty for Erroneous Claim for Refund or Credit.— Effective Dates.— In general.—The provisions of this section shall apply to aid, assistance, and advice provided after the date of the enactment of this Act [July 4, 2025]. Limitation on credits and refunds.—Subsection (d) shall apply to credits and refunds allowed or made after the date of the enactment of this Act. Extension of limitation on assessment.—The amendment made by subsection (e) shall apply to assessments made after the date of the enactment of this Act. Amendment to penalty for erroneous claim for refund or credit.—The amendment made by subsection (f) shall apply to claims for credit or refund after the date of the enactment of this Act. Regulations.—The Secretary (as defined in subsection (a)(5)) shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section (and the amendments made by this section).”