IRS Publication 5887 – IRS Forms, Instructions, Pubs 2026 – The Employee Retention Credit (ERC) was one of the largest pandemic-era tax relief programs, offering eligible employers a refundable credit for qualified wages paid between March 13, 2020, and December 31, 2021. However, the IRS has repeatedly warned about widespread incorrect and fraudulent claims, leading to aggressive reviews, processing delays, and new legislative restrictions under the One Big Beautiful Bill Act (OBBBA).
IRS Publication 5887 (Rev. December 2024) — titled Employee Retention Credit Eligibility Checklist: Help with avoiding or resolving an incorrect claim — serves as the official, step-by-step tool to determine eligibility and decide what to do next. This free IRS resource helps businesses and tax-exempt organizations check eligibility, claim the credit correctly if qualified, or safely withdraw or correct an improper claim.
Using Publication 5887 can help you avoid repayment demands, penalties, interest, and potential audits — issues that remain highly relevant in 2026 as the IRS continues processing claims and enforcing compliance.
What Is IRS Publication 5887 and Why Does It Matter in 2026?
Publication 5887 is a concise, question-and-answer checklist published on IRS.gov. It walks employers through a logical eligibility review and provides clear next steps in three parts:
- Part A: Check your eligibility (the core 5-question checklist).
- Part B: Claim the ERC if you’re eligible.
- Part C: Resolve an incorrect ERC claim.
The IRS updated and re-released the publication in December 2024 and continues to promote it prominently on the main ERC page and in newsroom guidance. With millions of claims under review and new restrictions on certain 2021 claims, the checklist remains the IRS’s primary tool for self-assessment and compliance.
Part A: The ERC Eligibility Checklist – Answer These Questions in Order
The checklist is designed to be answered sequentially. Stop and follow the instructions at each “No” or “Yes” branch.
Question 1
Did you (1) operate a trade or business or tax-exempt organization and (2) have employees to whom you paid wages between March 13, 2020, and December 31, 2021?
→ No → You are not eligible. Go to Part C if you already claimed the credit.
→ Yes → Continue to Question 2.
(Note: Household employers are explicitly not eligible.)
Question 2
Did your business experience the required decline in gross receipts during the eligibility periods in 2020 or the first three quarters of 2021?
→ Yes → You may be eligible. Confirm the exact percentage decline required for your period and go to Part B.
→ No → Go to Question 3.
Question 3
Are you claiming the ERC because of supply chain issues?
Critical warning from the IRS: A supply chain disruption by itself does NOT qualify you for the ERC. You must still meet the government-order suspension test in Question 4. Review IRS.gov/ercsupply and the legal memo AM-2023-005 carefully before proceeding.
→ Yes → Be extremely cautious. Verify your supplier’s government order meets the criteria in Question 4.
→ No → Go to Question 4.
Question 4
Was the operation of your business or organization fully or partially suspended by a government order (not guidance or recommendation) due to COVID-19 during 2020 or the first three quarters of 2021?
The order must have directly limited commerce, travel, or group meetings and caused more than a nominal portion of your operations to be suspended. You can only claim wages paid during the exact period the order was in effect.
→ Yes → You may be eligible. Document the order, its effective dates, and how it suspended operations. Go to Part B.
→ No → Go to Question 5.
Question 5
Were you a recovery startup business (RSB)?
To qualify as an RSB you must have:
- Begun carrying on a trade or business after February 15, 2020;
- Average annual gross receipts of $1 million or less for the three prior tax years; and
- Not qualified under the gross receipts test or suspension test.
RSBs are limited to a maximum $50,000 credit per quarter and can only claim the credit for Q3 and Q4 of 2021.
→ Yes → You may be eligible. Go to Part B.
→ No → You are not eligible for the ERC.
Part B: How to Claim the ERC Correctly (If Eligible)?
If the checklist directs you here:
- Gather complete documentation: payroll records, gross receipts, government orders, supplier details (if supply-chain related), and calculations of qualified wages.
- File (or have already filed) on an adjusted employment tax return (Form 941-X, 943-X, 944-X, or CT-1X).
- The IRS strongly recommends working with a trusted tax professional who is not paid on a contingency or “refund-based” fee.
- Always check IRS.gov/erc for the latest FAQs, examples, and scam alerts before filing.
Part C: How to Resolve an Incorrect ERC Claim (2026 Options)?
If you have already filed a claim and now realize (or suspect) it was incorrect, act quickly. The IRS offers two main paths:
- ERC Claim Withdrawal Process (best option if available)
Use this if the IRS has not yet paid your claim or you received a check but have not cashed or deposited it.- Make a copy of the adjusted return.
- Write “Withdrawn” in the left margin of page 1.
- Have an authorized person sign and date the right margin (include name and title).
- Fax to the dedicated ERC withdrawal line: 855-738-7609.
Withdrawal treats the claim as if it was never filed — no penalties or interest if accepted.
- File another adjusted return to reduce or eliminate the ERC amount (if withdrawal is not available).
Important 2025–2026 context:
- The One Big Beautiful Bill Act (signed July 4, 2025) prohibits refunds for most 2021 Q3/Q4 claims filed after January 31, 2024 (unless the refund was already received before that date).
- The IRS is accelerating reviews and has processed millions of claims while flagging improper ones.
- A second Voluntary Disclosure Program closed in November 2024, but the withdrawal process remains open for eligible claims.
Key Warnings from the IRS (Still Critical in 2026)
- Unscrupulous promoters continue to oversimplify eligibility and charge high contingency fees.
- Supply-chain claims are under particular scrutiny.
- The IRS “Dirty Dozen” list has repeatedly highlighted ERC scams.
- Audits can occur up to six years after filing for certain 2021 claims.
Quick-Reference Table: ERC Eligibility Paths
| Eligibility Path | Time Period | Key Requirement | Maximum Credit (per employee) |
|---|---|---|---|
| Government Order Suspension | 2020 & Q1–Q3 2021 | Full/partial suspension by government order | Up to $5,000 (2020) / $7,000 (2021) per quarter |
| Significant Gross Receipts Decline | 2020 & Q1–Q3 2021 | Specific % decline (varies by year/quarter) | Same as above |
| Recovery Startup Business (RSB) | Q3 & Q4 2021 only | Started after Feb 15, 2020 + ≤$1M avg. receipts | $50,000 per quarter max |
Additional IRS Resources (All Current as of 2026)
- Main ERC page → IRS.gov/coronavirus/employee-retention-credit
- Printable Publication 5887 PDF → IRS.gov/pub/irs-pdf/p5887.pdf
- Full ERC FAQs → IRS.gov/coronavirus/frequently-asked-questions-about-the-employee-retention-credit
- Withdrawal instructions → IRS.gov/newsroom/withdraw-an-employee-retention-credit-erc-claim
- Scam reporting and red flags → IRS.gov/erc
Final Advice
Publication 5887 is the IRS’s clearest, most authoritative tool for ERC compliance. Whether you are reviewing a past claim, preparing documentation for an audit, or deciding whether to withdraw a filing, start with this checklist and consult a reputable tax professional who is not affiliated with ERC marketing campaigns.
Do not rely on unsolicited offers, social media ads, or “guaranteed approval” promises. The safest path is always the official IRS guidance.
Download Publication 5887 today, walk through the questions, and take the appropriate action under Part B or Part C. Protecting your business from unnecessary repayment, penalties, and interest starts with accurate eligibility determination.
For the most up-to-date information, always visit IRS.gov/ERC directly.