While the average processing time for Employee Retention Tax Credit (ERTC) claims is currently two or three months, some businesses have been waiting for a year to receive their refund. 

If you are still waiting for your ERTC refund, you’re not alone. According to Bloomberg, more than 10 million ERTC claims have yet to be processed by the IRS. This article sheds some light on what is causing the delays and what you can do to expedite your claim. 

This article addresses the most common causes that have led to delays in processing ERTC claims and what you can do about it. 

Changes in Submission Requirements 

At the beginning of the program, businesses could file for the credit by submitting Form 941 online. However, if you are filing for ERTC retroactively, you have to file an amended return using Form 941-X. This form cannot be filled out online. Instead, has to be printed and mailed. Because it’s on paper, it requires additional manual steps, which also take extra time. 

Before the switch to the new form, claims were already significantly delayed. This was due to the IRS being unable to process any claims until approximately 12 months after the program was initiated. As the program evolved and the form submission process changed, IRS personnel received zero supplemental training to help them expedite claims. 

Current processing times for businesses claiming ERTC funds using Form 941-X are approximately five to six months. The size of your claim may also affect processing times. The five to six-month timeframe applies to ERTC claims under approximately $1 million. For claims totaling more than $1 million, the refund may take up to 10 months to receive.

Then in September, the IRS issued a moratorium on claim processing through January 2024. 

IRS Guideline Errors 

In addition to the above reasons for delays, it turned out that there were some errors in the IRS guidelines regarding Form 941-X submissions. As a result, the IRS temporarily suspended processing. This caused some form applications to get further backed up by an additional 200 days

How the IRS Is Expediting Claims 

The IRS has acknowledged these delays and is making moves to get its head above water. Some recent actions include: 

  • Authorizing overtime for IRS employees
  • Hiring additional staff to process claims and provide customer service
  • Shifting the focus of IRS tasks to paper returns
  • Allocating more IRS employees to process ERTC claims
  • Improving processes to be more efficient 

Can You Take Any Action to Expedite Your ERTC Claim? 

As of now, the best advice is to be patient and wait. You can keep an eye on the IRS and TIGTA (Treasury Inspector General for Tax Administration) websites for any updates about claims processing. 

If you’re curious about the status of your ERTC refund, you can now check it online here. Another option is to call the IRS helpline directly. Either way, it will take some time for the IRS to communicate your status (up to four weeks). 

The IRS advises you to avoid filing a second claim if you’re still waiting. Not only will this tactic not speed up your refund, it could cause even lengthier delays. 

Contact an Experienced Tax Attorney About ERTC Delays 

As a reminder, ERTC is part of the Coronavirus Aid, Relief, and Economic Security Act that provides businesses with funding and resources to help them weather the economic effects of the COVID-19 pandemic. 

At Dayes Law Firm, we have helped hundreds of small businesses file for more than $250 million in ERTC funds. Contact us at 866-875-1005 for a free consultation.