How to Check ERC Refund Status: The Essential Guide (2024)

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In this article, we’ll answerthe following questionsand more:

How do I Check my ERC Refund Status?

Many small business owners are relying on their Employee Retention Credit (ERC) refund claim to support operations. Whether you’re trying to fuel growth or get caught up on debt incurred during the pandemic, the money could be a much-needed lifeline.

If you’ve already filed, you might wonder, “where’s my refund?” Unfortunately, the Internal Revenue Service doesn’t provide a convenient online tool to check the status of ERC refunds the way it does for personal income tax refunds.

Note: Some online resources state you can check your status online at the IRS website, but the IRS hasn’t confirmed businesses can track Employee Retention Credit refunds online.

Instead, there are only two possible ways to check your status.

Call The IRS

The most direct way to check your IRS ERC refund status is to call the IRS at 1-877-777-4778. If you filed independently, it’s also the only way to check.

However, you might have difficulty getting ahold of an IRS representative for information on your refund status. Many business owners have mentioned long hold times when trying to contact the IRS. You can also try calling the IRS Business Specialty & Tax Line at 1-800-829-4933 if you have difficulty reaching a live agent.

In addition, an IRS agent can only give you a status update if it’s processed your Form 941-X. If you’ve only recently sent it in, it might not have arrived or been entered into the system.

Be prepared to provide identifying information, such as:

• Your legal name.
• Filing status.
• Federal identification number.
• Your relationship to the business (owner, accountant, consultant, etc.)
• The business’s postal address.
• Year of formation.
• The type of tax return filed for the firm.

Third-Party Consultation

Due to the complications around ERC refunds, many businesses have hired consultancy firms or used a third-party ERC filing service to file their amended 941x and claim the credit. You can speak with the tax firm or consultancy service that filed on your behalf in those cases.

How long does it Take to Get My ERC Refund?

The current timeline for the IRS to process refund requests is 9-12 months. The agency recently announced it’s slowing down the ERC refund processing time to identify incorrect or fraudulent claims better.

That means receiving your refund may take well over a year if you file today. The wait times are far from the IRS’s initial 4–8-week processing time.

Why do ERC Refunds take so long?

Current ERC refund delays are due to several reasons. The IRS is dealing with a backlog of unprocessed payroll tax returns. There are several contributing factors to the employee retention credit refund requests backlog.

Paper Applications & Snail Mail: Unlike other tax documents that can be filed online, businesses must fill out tax Form 941x on paper and mail it. You can send it by rush order, but it will still take much longer for the IRS to receive it than an electronic submission.

Manual Processing & Understaffing: Due to the complexity of ERC refunds and form 941x, the IRS maintains a specialized ERC team that manually processes the requests. The agency has also had staffing issues recently, so the manual process takes longer.

IRS Slowing Processing: As mentioned, the IRS announced it’s slowing down its process of approving ERC claims and issuing refund checks. Part of the reason for the further delays is that ERC refunds are currently triple the estimated amounts. The IRS states that erroneous and fraudulent ERC claims are the reason. While it’s understandable that the agency would want to crack down on fraud, that doesn’t help the many businesses that filed correctly and are waiting for their legitimate refund.

How will I Receive my ERC Refund?

The IRS usually issues a check for the refund amount mailed to your business address on file. Notice CP210 will likely accompany the check.

The notice provides information about your refund. It also explains discrepancies between the check amount and the refund, if any. Some reviews suggest getting it by direct deposit is possible, but we’ve mostly seen the refund sent as a check.

Can I get my ERC Refund Expedited?

Unfortunately, the IRS does not provide an expedited process. Once you file, you must wait until your check shows up in the mail, which could take up to or over a year with the current delays.

The IRS allowed certain advance payments during the COVID-19 pandemic using Form 7200. However, it stopped accepting Form 7200 after January 31, 2022.

If you haven’t filed yet, the best thing you can do is ensure your Form 941x is error-free. Mistakes can cause processing delays that could further delay receiving the refund check.

Is there any way to Get ERC Funds sooner?

While the IRS doesn’t provide any method to get your funds sooner, several financial institutions offer ERC loans also called an ERC advance. Keep in mind these options require paying either interest or fees.

However, it does mean getting your funds much sooner, typically in a couple of weeks. Financing companies offer ERTC advances so you can access and use the funds to support and grow your business. This process essentially sells your ERTC ownership in exchange for an advance.

When the IRS issues the employee retention credit refund check, it goes to the lender to repay the advance. Some lenders will charge a small monthly interest rate until the check is received, while others might charge a one-time fee.

Ensure you fully understand the advance payment policy before signing over ownership of the credit.

ERTC Advance Pros & Cons

Pros:

• You get to access your refund sooner.
• You can use the funds to cover operational expenses.
• Potential tax deduction on interest.

Cons:

• You’ll have to pay interest on the advance.
• Must reconcile the ERC advance against the actual ERC at the end of the quarter.
• Requires extensive documentation.

How do I apply for an ERC Advance?

Follow these steps to request advance payments for ERC through United Capital Source

Step 1: File for your ERC with the IRS

If you haven’t already done so, the first step is to file for your ERC. You can file independently, or our dedicated ERTC experts can help you complete the filing process and get the maximum credit possible.

Step 2: Gather your documents.

You’ll need the following documents when you request an ERC advance payment:

• A completed application.
• IRS Form 8821 & 7216.
• IRS Form 941 (original) and 941x (amended) for each quarter filed.
• ERC calculations.
• Documentation for ERC qualification from the filer.
• 941s for the two most recent quarters.
• Government ID for all business owners with a 20% stake or greater.
• Most recent business tax return.
• Bank statements for the previous three months.
• An adjusted employment tax return (if required).

You will also need to provide the following after approval but before funding:

• W-9 by the authorized signer(s).
• Copy of your operating agreement.
• Voided check from your business bank account.

Step 3: Complete the application.

You can download the application form or visit the application page to complete the process.

Step 4: Consult with an ERC expert.

One of our funding experts will reach out to discuss your advance payment application. The call will cover the refund amount, the timeline for receiving your advance, and any associated costs.

Step 5: Accept and get your funds.

Once we finalize the application process, you can expect to receive your funds according to the discussed timeline. Repayment occurs when we receive the ERC refund check from the IRS.

Frequently Asked Questions

Here are the most common questions about ERC refund requests.

What is the ERC Refund Process?

The Employee Retention Tax Credit (ERC) was a refundable tax credit to incentivize businesses to retain employees during the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Securing (CARES) Act established ERC tax credits. It’s also sometimes called the Employee Retention Tax Credit (ERTC).

Eligible employers included those ordered to shut down by a local government or experienced a reduction in receipts by 50% or more during the corresponding month in 2019. Businesses that were not in operation in 2019 can’t claim the credit.

Under the tax provision, eligible businesses could claim a refund for qualified wages paid during the pandemic. The provision underwent several changes and adjustments since its initial implementation under the CARES Act.

Is my Business Eligible for an ERC?

The qualifications for an eligible employer depend on the tax period during which the qualified wages were paid. Eligible employers include private sector businesses and tax-exempt organizations.

Businesses with 100 or fewer full-time employees can claim the ERC for all wages paid during the eligible period. Businesses with more than 100 full-time employees can only claim the credit for wages paid to employees who didn’t perform services due to suspension or decline in business.

Qualifying Businesses March 13, 2020, to December 31, 2020

To receive the ERC for qualified wages paid during this period, your business must have carried on trade or have been a tax-exempt organization that:

• Was ordered to partially or fully shut down by a government authority, or
• Experienced a decline of 50% or more in gross receipts for the corresponding quarter in 2019 due to COVID-19-related decline.

Qualifying Businesses January 1, 2021, to September 30, 2021

To receive the ERC for qualified wages paid during this period, your business must meet the following conditions:

• An appropriate government authority ordered fully or partially shut down business operations or
• Experience a decline of 80% in gross receipts for the corresponding quarter in 2019 due to Covid-related decline.

Qualifying Businesses October 1, 2021, to December 31, 2021

Most businesses do not qualify for the ERC on wages paid during Q4 2021. The sole exception applies to recovery startup businesses. The IIJA amended section 3134 of the Internal Revenue Code to exclude all companies except recovery startups as defined in section 3134(c)(5).

If you reduced employment tax deposits for Q4 2021 wages on or before December 20, 2021, consult with your tax professional to see if you are exempt from the “failure to deposit” penalty or not.

What are the Deadlines for ERC Refunds?

There are two deadlines to know, one for filing 2020 claims and one for 2021 claims:

• April 15, 2024: Deadline for 2020 Q2, Q3, and Q4.
• April 15, 2025: Deadline for 2021 Q1, Q2, Q3, and Q4 (if applicable).

How can I File an ERC Refund?

Businesses can apply for credit on wages during the active period (March 13 and 2020-September 30, 2021, for most companies). You can consult your accountant or tax pro on completing forms 941 and 941x for an amended payroll tax return, or we canhelp you file for the ERTCwith a free consultation.

With over 170 pages of documentation, the ERTC can be complex and confusing to navigate. UCS has created a fast, stress-free process so businesses can receive the maximum amount available through the ERTC.

How to Check ERC Refund Status – Final Thoughts

The ERC Refund can provide businesses with much-needed relief, but the delays and complications can be a headache. The only definitive way to check your refund status is to call the IRS and deal with their long wait times.

Businesses that use a consultant or ERC service could also contact them about the status. However, there’s no way to expedite, and the current delays in receiving the refund are 9-12+ months.

Contact us if you have more questions about filing for an ERC refund, checking your refund status, or applying for an ERC advance. Our business funding experts can answer any questions or provide guidance on applying for a small business loan if you need funds before the check arrives.

• Categories: Business Tips