IRS processing of Employee Retention Tax Credit claims remains stalled
The Employee Retention Tax Credit (ERTC), AKA the Employee Retention Credit (ERC), is a refundable tax credit created via bipartisan congressional action in 2020 and 2021 in order to support businesses harmed by government-ordered shutdowns and restrictions during the COVID pandemic. ERTC payments have helped many small businesses stay afloat.
However, the program proved to be more popular than the IRS expected. Thanks to a large backlog of pending claims, as well as cases of alleged and/or actual fraud among a small percentage of claimants, the IRS announced a moratorium on processing ERTC claims last September, in order to focus on ensuring compliance among pending claims.
According to its March 22, 2024 update, the IRS still faces a backlog of more than one million unprocessed claims. From all reasonable appearances, the moratorium continues.
When will my claim be processed?
When the IRS resumes processing claims, two factors may affect a claim’s processing speed–the size of the claim, and the date it was received. It is reasonable to expect that larger claims will be subject to more scrutiny, and thus face longer wait times. It is also reasonable to expect that the IRS will process ERTC claims roughly in the order in which they were received.
Estimates vary widely regarding how long it will take as of now (April 2024) to receive an ERTC refund.
The truth is that the IRS has not released enough information for anybody to make an accurate prediction.
How can I track the status of my ERTC claim?
Thousands of business owners mailed amended Forms 941x to the IRS in order to claim ERTC refunds, and are now wondering months (or years) later whether or not the IRS received their submission.
Although we sympathize with the uncertainty created by these long response times, it is unlikely that your submission was lost in the mail. Arvo recommends that all its clients send correspondence with the IRS using USPS Certified Mail in order to receive verification of delivery.
If you sent your ERTC claim using another method, or never received confirmation of delivery, you may call the IRS business helpline to request a status update. As a courtesy to our clients, we call around eight months after submission to do the same.
What are my other options?
If you can’t wait for the IRS to process your ERTC refund, various lenders are now offering bridge loans and/or cash advances in exchange for a percentage of your claim.
Arvo neither promotes nor discourages the pursuit of these options, and recommends a careful and thorough cost/benefit analysis before entering into any loan agreement of any type.