Have you claimed and filed your Employee Retention Tax Credit and are waiting to hear about its status? Find out the best way to check your ERC refund status.
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Once you’ve claimed the Employee Retention Credit, the next step is to wait on your ERC refund check from the IRS — but when will it arrive? How do you check the status of your ERC refund? How will you receive your refund? And can anything inhibit your refund from being approved?
We’re here to explain how to check the status of your ERC refund, how to understand ERC refund processing timelines, and how to avoid potential delays in refund processing. Keep reading to learn more about how to check your ERC refund status.
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While eligible small businesses should claim the ERC refund, it’s important to understand that this isn’t a fast funding solution. The IRS initially gave a timeline of 90 days for ERC refunds, but taxpayers claiming the credit early in the process generally waited four to nine months to receive their refund checks from the IRS, according to popular processor StenTam. The turnaround time was even longer for those who waited to file, with timelines running 12 months or more to receive the ERC refund — and these wait times were before the ERC pause.
On September 14, 2023, the IRS paused processing new ERC claims.
Existing claims are still being processed, but processing times went from 90 days to 180 days. New claims can still be submitted, but the IRS won’t start working through them until January 1st, 2024, at the earliest– so like we said, it’s not a fast funding solution.
On November 14, 2023, IRS Commissioner Daniel Werfel announced that the IRS is updating its ERC review procedures and will begin processing new ERC claims in the near future following the moratorium. On January 10, 2024, Werfel made a similar announcement and said taxpayers can expect a spring timeline for new claims.
The best way to check the status of your ERC refund is to call the IRS directly. However, it isn’t guaranteed that you’ll be able to find out any information on the status of your ERC refund. Taxpayers have also reported long hold times, while others had difficulty getting a live person on the phone.
There have been some reports that you can track your ERC refund online. At this time, the IRS has not confirmed that ERC refunds can be tracked online.
Despite the promising verbiage, the IRS’s “Where’s My Amended Return?” page is used to track Form 1040-X, and the IRS page “Where’s My Refund?” is used to track refunds from Form 1040. Since ERC refunds use the 941-X form, you’re best bet is to call them directly about your ERC refund.
To check your ERC refund status with the IRS, call the IRS at 1-877-777-4778.
When you call the IRS, you will need to provide information to verify your identity. This may include your legal name, federal identification number, filing status, and additional info.
If you’re having difficulties reaching a live agent by phone, you can also try calling the IRS at 1-800-829-4933.
Third-party ERC funding companies file Form 941-X on your behalf in exchange for a fee. Whether you have filed the 941-X or hired an expert to do it for you, the process is still the same. Therefore, you will need to contact the IRS by phone to learn more about the status of your refund.
You can also reach out to the company you hired to learn more about any potential delays, updated guidance from the IRS, and inquire about other funding options if you need cash quickly. Several ERC refund companies also offer ERC loans to help you get access to funds quickly, so it’s worth checking if your ERC processing company offers that as an option.
Once your ERC refund is approved, you’ll receive a CP210 from the IRS stating that there has been a change to your tax return and let you know the approved refund amount. You’ll then receive the funds via check or direct deposit, depending on how you filled out your ERC application.
If you opt for the direct deposit route, you’ll likely receive your funds more quickly than if you choose a check mailed to your business’s address on file with the IRS.
According to the IRS, a backlog of amended returns is partially responsible for the delay as well as an uptick in erroneous claims that led to a pause in processing all new ERC applications.
Another factor in the slow ERC processing times is that, unlike other tax forms, form 941-X, which is used to claim the ERC is a paper form that is mailed to the IRS — no eFiling is available. This contributes to a slower process, as each paper form must be manually processed.
Since the ERC is quite complex, a specialized ERC team has to handle these claims. A study done by the Treasury Inspector General For Tax Administration identified several “concerns with the IRS’s processes to implement retroactive termination of the Employee Retention Credit.” Add in the fact that the IRS has notoriously struggled with understaffing in recent years, and it’s not hard to see why ERC claims are delayed.
While you can’t directly speed up the ERC refund process, you can get an advance of your ERC funds with an ERC loan. Check out the best ERC loans for a lender that can get you your ERC funds in weeks, not months.
In addition to the amended return backlog and staffing issues of the IRS, there are other potential delays in receiving your ERC refund. This includes:
While you can’t speed the IRS along in processing your ERC refund, you can make sure that you complete your forms, calculate your ERC accurately, and are prepared to wait potentially a year or longer for delays outside of your control.
In the IRS’s most recent statement, they hinted at additional verification being needed for some claims. While we’re still waiting to see what these verification measures might be, staying on top of any communications with the IRS (and checking back in here for updates) is the best way to make sure your ERC claim is complete and able to be processed.
Unfortunately, there’s no real way to significantly speed up the ERC refund process. Once your tax forms have been submitted to the IRS, all you can do is wait until your claim is processed. However, if you opt for direct deposit instead of a paper check, you will likely receive your ERC refund faster.
You can also get access to the amount of your ERC refund minus a fee with an ERC loan if you can’t wait upwards of 180 days for existing ERC claims.
If you haven’t yet claimed your ERC, the best thing you can do is ensure there aren’t any errors, as this can further delay the process. Errors can include anything from miscalculations to leaving off a signature.
Check out our post that walks you through how to fill out Form 941-X to avoid these missteps. You can also hire a professional to file your claim for you. Start your search with our top picks for the best ERC tax credit services.
The IRS is not going to deny eligible, correct ERC claims.
ERC isn’t like PPP where there is a max on available funding. The ERC is a tax credit, so you will get your ERC refund eventually if you are eligible and filled out your paperwork correctly. You may be audited, but a proper claim won’t be denied.
If the IRS does deny your claim, it would be because the claim was erroneous (you didn’t meet the ERC qualifications) or your forms were not filled out correctly.
The best options for getting faster access to ERC Funds are:
When it comes to getting your ERC credit, patience is key. And while you may not be able to get all of the answers when it comes to your ERC refund status, you can rest easy knowing that if you filed your 941-X correctly, you will get your ERC refund.
In the meantime, if you have any additional questions, our team is happy to help and will continue posting regular ERC updates and best practices.
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