Was the ERC program terminated early?

We received a phone call from a contact concerned about the "Tax Relief for American Families and Workers Act of 2024" as it pertains to the Employee Retention Credit program. Although this act was passed in the House, it now moves to the Senate. As the Senate has not passed this act on or before the January 31, 2024 date proposed for early termination of ERC, an addendum would have to be written to change the early termination date to a date in the future. 

This is why it is more critical than ever to get your application filed ASAP. 

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. 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.

 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. 

LeeAnne CFO makes regular calls to the IRS to check refund status on our clients behalf and reports any updates back to the client. The intent is to save our clients time, but clients can always call the IRS directly for updates.  To check your ERC refund status with the IRS, call the IRS at 1-877-777-4778. You should expect up-to a 3 hours wait on hold to speak with an agent.

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.

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.

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 — eFiling is no longer available. (Previously eFiled returns needed to be followed up with paper filings). 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. Add  in the fact that the IRS has notoriously struggled with under-staffing  in recent years, and it’s not hard to see why ERC claims are delayed.

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. 

You can also get access to the amount of your ERC refund minus a fee with an ERC loan if you can’t wait for existing ERC  claims.