When you have filed your Employee Retention Credit but are still waiting for the refund, you may be curious whether it may appear. If this is the case for you, a backlog may exist within the IRS system. This backlog has been making the ERC refund processing time much slower due to thousands of applications existing.
You, like many others, are asking themselves, "How long does it take to receive employee retention credit refund." The average ERC refund takes 6 to 8 weeks but because of the backlog, there is a chance you may not see a refund until at least 6 months have passed. Plus, checking the status of the refund may be a challenge. If you are facing this dilemma, it is excellent to know that you have options to help so that you are not waiting long.
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Haven't Filed for ERC Yet?
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Finding Out Your ERC Refund Status
After filing, you have the right to check the status of your ERC refund and the amount of time it will take for you to have it in your hands. The best method to do this is by getting a hold of your local IRS office.
Contacting them can be done online or by calling their helpline. Once in contact, you should have your tax information, Employer Identification Number, and social security number. This readily available information allows the IRS to pull your ERC and check its status. You will also obtain status notification via mail within a few weeks of filing the ERC.
If there is no notice of refund status received, Form 8849 may be filed to claim excise tax. Although this option is available, it cannot process the ERC claim any faster.
Calling the IRS directly may see you waiting for a long time with hundreds of other claimants. There may even be times when the IRS is unreachable by calling them. Regardless, this should encourage you to make attempts.
A benefit such as the ERC is a great one to take advantage of as an employer and helps retain great employers. It also helps ensure that business runs as usual regardless of difficulty.
You should be aware that when the status is checked, it does not mean the refund will be refunded faster.
Understanding the ERC Processing Times
While the waiting game may seem like forever, it has only been around two months to see a refund after it has been filed. You should know that processing times are different for all businesses. At the beginning of the filing process, the processing was at least four weeks and six weeks at most. Now, this wait has doubled due to the backlog.
Correlation With the Pandemic
It goes without saying that there is a correlation between businesses and the pandemic nationwide. Because of this, there needed to be a shift in the way business was conducted and the amount of work needed.
Because of this, the new Employee Retention Credit had become an excellent supplement for financial assistance that helped a business to retain great employees. Since the initial undertaking, the credit has grown to include many more types of companies and employees.
With pandemics being commonplace today, many programs, including ERC and Paycheck Protection Program, remain vital in helping businesses move into the future.
With the Employee Retention Credit being fully refundable, it is available for taxes paid the previous year.
There will not need to be any additional filing through the IRS in order to obtain the credit, as the process is not determined by the number of times you file.
IRS Staff Shortage
When you filed for the ERC refund, the processing could have been faster due to the paper forms being submitted. With no online submission available, businesses experienced a slow timeline from when they filed until the refund was received.
Due to changes in legislature, a business can file for a retroactive refund through amended payroll returns. With these amendments, the IRS needs to process these manually.
Not only that but the IRS staff was also hit by the pandemic, which caused a shortage in staff. So because of the staff shortage at the IRS and the huge amount of demand for the ERC, a backlog has developed. So "how long does it take to receive ERC refund?" It varies, but you should immediately start the process to mitigate any downtime.
File With a Professional
With the filing process for ERC being new, few are aware of how to go about the process. If this is the case, you need to contact a professional to get your ERC filed.
It is essential to consider the credibility of the professional service as well so that you can expect your refund to be delivered a lot sooner. This will also help keep your business doors open longer. The service provider will be able to have your tax calculated for the credit and submit the necessary documentation needed for filing the ERC. Learn about the top 7 ERC companies here.
You can also determine your eligibility when you work with a professional service and that your filing is completed within the set deadline.
What You Can Anticipate
How your taxes were filed will determine what you can anticipate from the ERC. To get the quickest refund, filing taxes online will have you receive your tax refund electronically and through direct deposit.
Having direct deposit for tax refunds will also make it quicker for you to receive the ERC refund. However, there is no guaranteed method.
Don't Let the ERTC Refund Opportunity Pass You By
Although the time for processing the ERC has been extended, the ERC is a great tool that offers value to a business and its staff. You need to be sure to take this advantage and not let the opportunity pass you by.
With the returns being slowly processed, the fact remains that they are being processed daily. For most businesses, an ERC can boost income during a time that money can cut high costs seen during the pandemic.
When filing, you need to file the ERC correctly. To do this, it is best to have a service provider who can accomplish it without error.
Final Thoughts About Employee Retention Credit Processing Time
The devastating pandemic from COVID-19 made many businesses remain closed, and the struggle is still being felt today. However, it is good to see that recovery has been progressive, and many employees have already returned to the office.
When the ERC was started, it was assured that issues would be addressed once an ERC refund was obtained. So if you are waiting, it is a good idea to remain patient because of the slow processing.
Haven't Filed for ERC Yet?
Our team spent hours researching and evaluating different companies. We narrowed it down to 5. The best of the best.