Employee Retention Credit Repayment Reserve Calculator

Estimate the cash you should ring-fence if the IRS claws back part of your Employee Retention Credit. Blend the at-risk claim amount with optional penalty assumptions and ongoing IRS interest so the reserve covers the full exposure when a notice arrives.

Aggregate ERC amount your organization claimed across all quarters.
Share of the claim you believe may be clawed back after review.
Annual rate published by the IRS for corporate underpayments.
Estimated number of months before the case is resolved or settled.
Add any expected accuracy or negligence penalty as a percent of the disallowed amount. Leave blank if none anticipated.

Informational only; consult your tax advisor before taking action.

Examples

  • ERC claim $480,000, disallowance 40.0%, penalty 15.0%, interest 7.0%, resolution in 18 months ⇒ Reserve target: $243,984.00 | Interest accrual: $23,184.00 | Potential repayment: $192,000.00 | Potential penalties: $28,800.00
  • ERC claim $325,000, disallowance 18.0%, penalty left blank, interest 6.5%, resolution in 10 months ⇒ Reserve target: $61,668.75 | Interest accrual: $3,168.75 | Potential repayment: $58,500.00 | Potential penalties: $0.00

FAQ

Does this include IRS penalties?

Yes, when you use the optional penalty field. It multiplies the disallowed amount by your estimated penalty rate before layering on interest.

How do I choose the disallowed percentage?

Audit supporting documentation, payroll records, and engagement letters to gauge which quarters may be challenged, then run best-, base-, and worst-case percentages.

Should I hold the reserve in a separate account?

Segregating the funds in a high-yield savings or treasury ladder keeps the cash liquid while earning interest until the final bill arrives.

Where can I find the current IRS interest rate?

The IRS updates underpayment rates quarterly in Revenue Rulings. Match the corporate rate for the quarter that covers most of your expected review period.

Additional Information

  • Interest compounds as simple interest on the combined repayment and penalty balance over the resolution window.
  • The optional penalty field models accuracy or negligence surcharges as a percentage of the disallowed amount.
  • If you expect legal or advisory fees, add them on top of the reserve target to avoid tapping operating cash.
  • Refresh the months input whenever the IRS issues new correspondence or extends the exam timeline.

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