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Customers Experiencing Lengthy ERC Refund Processing

At a Glance

Main Takeaway

The IRS has been struggling to process employee retention credit refunds. Taxpayers could be waiting months before their claims are processed, and there is little they can do to check on the status or timeline of their refund.

Next Step

Read on to learn more about the issue and what can be done.


ERC Refund Processing Time Slowed by Paper Returns

The Employee Retention Credit (ERC) program was generated in response to the COVID-19 pandemic to encourage businesses to keep employees on their payroll. It has since been modified by subsequent legislation from its original form. These changes have allowed many employers to retroactively claim the ERC on amended payroll tax returns that must be paper-filed and handled by specially trained IRS staff.

As a result, the IRS has been inundated with paper returns for ERC claims. This is compounded by a lack of qualified IRS staff available to handle the demand, resulting in lengthy refund processing delays.

If you filed an ERC refund claim, it could be a while before you see your refund. Taxpayers have reported waiting anywhere from 10–12 months for their ERC refunds, and in some cases longer.


ERC Refund Status Not Traceable

The IRS is currently developing updated electronic services that will provide more taxpayer information on ERC refund processing times and receipt of refunds. At the time of this writing, the best information available on the backlog of these returns can be found on the IRS COVID-19 operations page under the heading “What You Can Expect: Filed a Tax Return.”

Taxpayers should not attempt filing a second return. If the IRS determines that a taxpayer made a duplicate claim for a single tax refund, it will result in further delays.

The IRS also asks taxpayers to refrain from contacting them about the status of their returns. The Taxpayer Advocate reported that it is unclear how many people who call in will be able to speak with a representative. Those who do manage to talk with someone find that information about their return status is not traceable.


Haven’t Filed Yet? Contact Windes

If you have not filed for your ERC refund, don’t give up based on lengthy wait times. Employers qualified for the ERC should still consider filing an amended payroll tax return to claim the benefit. To learn how you and your business could benefit from the ERC, contact Windes today.


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