How Does My Company Access the ERC Money for COVID Relief?

July 12, 2023
Dayes Law Firm

Refundable tax credits, like the Employee Retention Credit (ERC), can provide much-needed relief for businesses that struggled during the pandemic. If you’ve applied for the credit but are still waiting on your money, you might wonder what’s taking the IRS so long.

Don’t worry, though: As long as you qualify, the IRS will send you your credit eventually. The bad news is that it might take longer than you’d hoped.

Learn everything you need to know about the ERC and IRS COVID relief below.

What is the Employee Retention Credit?

The ERC refunds eligible employers a percentage of qualified wages paid to employees kept on payroll during the COVID-19 pandemic. This is a fully refundable tax credit. If you’re eligible, the IRS could give you a credit of up to $5,000 per employee per quarter (for 2020) or $7,000 per employee per quarter (for 2021).

This program ended on September 30, 2021, but you can still claim it for prior years if you didn’t have a chance to before. This may apply if you took a Paycheck Protection Program (PPP) loan back in 2020, which barred you from also taking the ERC at that time. The IRS no longer has this restriction, which means you’re free to apply.

Where is My ERC Refund?

Claiming ERC and IRS COVID relief funds is fairly accessible.. If you qualify, the IRS will mail you a check or deposit the money into your bank account.

If it’s been months since you applied and you still don’t have your refund, that’s normal. The IRS is still experiencing serious delays due to office closures and backlogs. Normally, the IRS would take six to eight weeks to send you your credit. Now, though, expect to wait anywhere from four months to a year. The bigger your refund is, the longer your wait time might be.

If you’re wondering what happened to your money, you can call the IRS and ask at (800) 829-4933. You could also reach out to the IRS Taxpayer Advocate Service. When you call, be aware that the IRS might put you on hold for quite a while before someone can help you.

Who Qualifies for the Employee Retention Credit?

If you applied for the ERC on your employment tax return months ago but haven’t heard back from the IRS, it is possible your business may not qualify for the credit. Requirements to claim the credit are quite strict, and not every business meets them.

Your business may qualify if a government order forced you to partially or totally shut down during the pandemic. For instance, if you couldn’t meet with clients but were still able to work with your team remotely, that could count as a partial shutdown.

Another way to qualify is by experiencing a significant decline in your gross receipts. For 2020, you must have had at least a 50% decline in receipts compared to the same quarter in 2019. For 2021, that percentage changes to 20%.

You can qualify even if you took a PPP loan; however, the IRS will only give you the credit for wages that weren’t forgiven (or expected to be forgiven) by the loan.

Reach Out to Dayes Law Firm To Learn More About the ERC

At Dayes Law Firm, we know the process of applying for the ERC can be confusing. If you’ve applied for the ERC and IRS COVID relief but still don’t have your money, call our firm at (800) 503-2000. We can explain more about who qualifies and help you track down your credit.