Employee Retention Credit Pause IRS Refund
You're likely familiar with the Employee Retention Credit (ERC), a financial relief for businesses affected by COVID-19.
Recently, the IRS has hit pause on processing new ERC claims. You're probably wondering how this affects your business, especially if you're awaiting a refund.
Don't worry, we'll break down these changes, help you understand the implications, and guide you on what to do next.
To better understand this most recent pause on the ERC Refund program by the IRS, it is important to understand the following points:
- IRS ERC Refund Status
- ERC Refund Timeline 2023
- How Long to Receive ERC Refund
- ERC Fraud Claims
Let's navigate this together and keep your business on firm ground.
IRS ERC Refund Status
You're likely wondering about the status of your Employee Retention Credit (ERC) refund check, given the current delay and backlog in processing by the IRS. Understandably, this prolonged wait can be frustrating.
The IRS is currently handling a surge of ERC refund claims leading to millions of unprocessed payroll tax returns.
Rumor has it that the IRS may prioritize processing 2020 payroll refunds before the latest ones. The reasons for this strategy aren't entirely clear, but it's likely a measure to manage the influx of claims in an orderly fashion. Therefore, if you've filed for a refund in 2021, be prepared for a longer wait.
Originally, the IRS projected that refunds would be issued between six weeks to six months after the updated payroll reports were filed. However, due to the current circumstances, you should now anticipate a turnaround time of nine to twelve months. This timeline, while not ideal, is a reality you must prepare for in the current climate.
So, how can you check the status of your refund? The IRS has advised employers to call (877) 777-4778. However, be prepared for long wait times due to a shortage of operators. An additional number for ERC processing times is (800) 829-4933. A quicker way might be to visit the IRS website for Covid-19 newsroom updates.
ERC Refund Timeline 2023
Given the current IRS backlog, you might be wondering when to expect your Employee Retention Credit refund, but it's important to prepare for a potentially long wait. The IRS has made it clear that due to COVID-19 safety requirements and an overwhelming number of refund requests, processing times for Form 941 and Form 941-X have been significantly extended.
Below are a few key factors that can influence your refund timeline:
- COVID-related IRS processes: The IRS has had to adjust its operations to adhere to safety requirements, including remote work. This change in protocol has inevitably slowed down the processing times.
- Volume of requests: The IRS is dealing with an unprecedented number of refund requests, which has resulted in a lengthy backlog.
- Order of processing: The IRS is rerouting tax returns from offices that are understaffed to those with more personnel. All returns are processed in the order they're received.
You should also be aware of the IRS's efforts to speed up the process:
- Rerouting of tax returns: The IRS is moving returns from offices with less staff to those with more, aiming to expedite the processing time.
- Additional measures: The IRS is taking steps to not just reduce the time it takes to process returns and refunds but also ensure accuracy.
How Long to Receive ERC Refund
Feeling frustrated while waiting for your Employee Retention Credit refund, and wondering what's causing the delay? Your frustration is understandable, especially with the IRS's recent slowdown in processing ERC refund claims.
The delay is due to an immediate moratorium, effective until December 31, 2023, that the IRS imposed to assess the validity of the claims and curb fraudulent activities.
This pause doesn't impact claims filed before the moratorium; however, the processing speed has been deliberately slowed down to ensure thorough compliance reviews. Consequently, the standard processing goal has stretched from 90 to 180 days, and it could be even longer if the claim is subject to further review or an audit.
The IRS's intensified scrutiny means they might request additional documentation from you to confirm your claim's legitimacy. This step is crucial because any improperly claimed ERC must be paid back, possibly with penalties and interest. In extreme cases, criminal prosecution could occur.
Therefore, while you wait, it's wise to review the IRS's guidance and tools to help confirm your ERC eligibility. The IRS has frequently asked questions and a new question-and-answer guide to assist businesses in understanding their eligibility status.
How Long to Receive ERC Refund
Feeling frustrated while waiting for your Employee Retention Credit refund, and wondering what's causing the delay? Your frustration is understandable, especially with the IRS's recent slowdown in processing ERC refund claims.
The delay is due to an immediate moratorium, effective until December 31, 2023, that the IRS imposed to assess the validity of the claims and curb fraudulent activities.
This pause doesn't impact claims filed before the moratorium; however, the processing speed has been deliberately slowed down to ensure thorough compliance reviews. Consequently, the standard processing goal has stretched from 90 to 180 days, and it could be even longer if the claim is subject to further review or an audit.
The IRS's intensified scrutiny means they might request additional documentation from you to confirm your claim's legitimacy. This step is crucial because any improperly claimed ERC must be paid back, possibly with penalties and interest. In extreme cases, criminal prosecution could occur.
Therefore, while you wait, it's wise to review the IRS's guidance and tools to help confirm your ERC eligibility. The IRS has frequently asked questions and a new question-and-answer guide to assist businesses in understanding their eligibility status.
ERC Fraud Claims
The IRS is ramping up efforts to identify and penalize fraudulent Employee Retention Credit (ERC) claims. If you've claimed this credit, it's crucial to understand that the agency is taking a hard stance on those who attempt to exploit the system.
Any discrepancies in your claim could lead to severe consequences, so ensure your applications are accurate and follow all necessary tax laws and regulations.
In light of the IRS's increased scrutiny, you'll need to ensure your ERC claims aren't only valid but also backed up with adequate documentation to avoid being caught up in the crackdown on fraudulent filings.
If you're awaiting an ERC refund, expect longer processing times due to this heightened vigilance.
Here's what this means for you:
- Filing claims: You can still file refund claims, but make sure they're supported by eligibility documentation.
- Gross Receipts: Proof of a decline in gross receipts is necessary.
- Partial Shutdown: Documentation indicating a partial shutdown due to COVID-19 is required.
- Processing times: Prepare for a wait time of up to a year for refund payments.
- Additional Documentation: The IRS may request more information before processing your claim, so be ready with all necessary paperwork.
Best ERC Company
To protect yourself from unintentional misreporting, it is crucial that you enlist a qualified ERC filing company that focuses solely on this specific tax credit and nothing else. ERC Specialists is an experienced payroll tax company made up of former IRS agents and financial experts with decades of combined knowledge. This company’s advisory board members is also former state and national attorney generals. Your claim is in good hands with ERC Specialists.
Simply click the button below to get started with a quick qualification form hosted by LINQQs. Once the initial form and documentation are completed, LINQQs will transfer these documents to ERC Specialists for accurate and speedy processing.
It should be emphasized that despite the temporary hold on ERC processing, LINQQ’s and ERC Specialists continue to submit files and assist businesses in applying for the Employee Retention Credit. This will ensure that their clients will be at the front of the line when processing resumes. The program is still active, and the IRS is still accepting ERC submissions.
ERC Specialists BBB
ERC Specialists is Better Business Bureau accredited and has garnered numerous positive customer testimonials within Google Reviews as well. See the many testimonials below.
ERC Specialists Google Reviews
ERC Specialists Phone Number
ERC Specialists phone number is (385) 707-0170. As explained in the previous section, one of the few customer complaints with respect to ERC Specialists is their lengthy hold times. This is likely due to the ever-increasing volume of new claims due the increased awareness and accessibility of this specific tax credit.
It is therefore suggested that your start your claim via the form portal link below. Simply click the button below to be taken to the secure Linqqs ERC Qualification page to begin the claim process. From there, your claim information will be forwarded to ERC Specialists for speedy and, more importantly, accurate processing by the company’s seasoned accounting and legal team.
How Long Does It Take To Get A Refund From Employee Retention Tax Credit?
It's often confusing to figure out how long it takes to get a refund from the Employee Retention Tax Credit (ERTC). But don't worry, we'll explain it in this article.
First of all, when you apply for ERTC, you need to provide certain documents and information that your accountant or tax preparer will use to complete the process. This might include things like quarterly wage statements or payroll reports.
After you have everything ready, it usually takes 2-3 weeks for the project to be completed and for an amended 941-x form to be issued. But keep in mind that these figures can vary depending on factors such as the complexity of the situation, your compliance history with taxes, or if any additional documentation is needed.
That said, you should always check with your accountant or tax preparer about their timeline so that you know exactly when you're likely to receive your refund. No matter what though, it's important to make sure that all of your paperwork is properly submitted and up-to-date – otherwise delays may occur and could affect when you get paid back!
Employee Retention Tax Credit Qualifications
The Employee Retention Tax Credit (ERTC) is a great way to help employers keep their employees even during tough times. To qualify for the credit, there are certain criteria that must be met.
Here's what you need to know:
* An employer must have had operations suspended due to COVID-19 or experienced a significant decrease in gross receipts.
* If an operation was shut down by government order, it counts as suspension of operations.
* If the business saw a drop in revenue over 2020 or the first three quarters of 2021, then this would count as a significant decline in gross receipts.
A new startup business could also qualify if they meet certain requirements in either the third or fourth quarter of 2021.
It's important to remember that not all businesses will be eligible for ERTC -- but those who do can receive up to $7,000 per employee! This money can really make a difference and help companies stay afloat while trying times pass. Plus, once qualified, employers don't have to wait until next tax season to get the funds - they can start claiming them right away.
Employee Retention Tax Credit 2023 Deadline
Now that we know the qualifications for the Employee Retention Tax Credit, let's move on to when it needs to be filed by.
The present deadline is April 15th, 2025.This means that if you are looking to apply for this credit during any of these years, make sure you do so before those dates.
It’s important to note that even though there are many opportunities throughout the year to apply for different tax credits or deductions, ERC only has a single filing window per year. So don't miss out! It’s also worth noting that applying late could mean that you won't qualify for the maximum amount possible.
When it comes down to it, making sure you take advantage of all available credits and deductions is essential when filing taxes - especially ones like ERC which have such a short window of opportunity each year. Keep an eye out and make sure not to miss deadlines or else you may end up losing out on some valuable savings.
Frequently Asked Questions
What is the Employee Rentention Credit (ERC)?
The Coronavirus Aid, Relief, and Economic Security Ac, signed into law on March 27, 2020, included two programs to assist businesses with keeping workers employe: Employee Retention Tax Credit (ERTC) administered by the Internal Revenue Service and the Payroll Protection Program (PPP) administered by the Small Business Administration.
How is ERC different from the Payroll Protection Program(PPP)?
PPP funds are not taxable as revenue and you may still take deductions for the payroll covered by PPP. The funds from the PPP are distributed based on 2.5 months of payroll and a minimum of 80% of the funds must be used on payroll to be eligible for forgiveness.
ERTC tax credits, however, are credits (or refunds) for a percentage of payroll in each quarter that you qualify. There are specific rules for determining eligibility by quarter, and limiting the dollars that can be claimed for each employee.
If I Received Funds from the PPP, Do I Still Qualify for the ERTC?
The short answer is “Yes”. You can claim ERTC even if you received PPP funds. In March of 2021, The American Rescue Plan Act of 2021 created expansions and modifications to existing criteria of Employee Retention Tax Credit.
Businesses that received PPP funds could now also claim ERTC tax credits. ERTC credits can be retroactively claimed for businesses that qualified in 2020. The ERTC qualification period was extended through 9/30/21 with lower eligibility requirements.
The refundable credit amount increased from 50% of qualifying wages in 2020 to 70% in 2021. The per-employee cap on qualifying wages was increased from $10,000 for all of 2020 to $10,000 per quarter for the first 3 quarters of 2021.
How Do I Apply for the Employee Renention Tax Credit and My CPA Do This?
Unlike the Payroll Protection Program, there is technically no application process for the Employee Retention Tax Credits. You would simply claim the ERTC tax credit like any other tax credit by asserting to the IRS that you can legally claim the credit.
Whether your tax accountant is a CPA or EA, they most likely only prepare Federal and State Income Tax Returns. However, ERTC credits are claimed against Employment Taxes on Form 941, and cash advanced through Form 7200.
The ERTC program is quite complex, which one of the main reasons most CPA's do not mention or attempt the claim process. It is also the reason most businesses pursued the PPP loan instead.
For prior quarters, you must file an amended form (the Form 941-X) to reduce your current quarter’s tax contribution. Also, you must request a refund of excess credits.
ERC Specialists provide a focused and dedicated service for processing ERC claims exclusively. Most business CPAs reach out to ERC Specialists for their Employee Retention Tax Credit claim needs. Click the button below to access the secure LINQQs portal to qualify and get your claim started before this plan expires. This provides audit protection and peace of mind.
Click the button below to start your claim