How to Check the Status of Your ERC Claim

The Employee Retention Credit (ERC) provided eligible businesses with a refundable tax credit against certain employment taxes. For many businesses, claiming the ERC involved filing amended payroll tax returns, primarily Form 941-X. Understanding the status of these claims is important for managing business finances. This article provides guidance on how to check the status of an ERC claim, outlining the necessary information and available methods for tracking.

Information Needed to Check ERC Status

Before initiating a status inquiry for an Employee Retention Credit claim, businesses must gather specific documentation and identification details. The Employer Identification Number (EIN) is essential for the IRS to locate the correct business account. Businesses also need to identify the exact tax period(s) for which the ERC was claimed, typically specific quarters within 2020 or 2021.

Knowing the precise date the amended return, such as Form 941-X, was originally filed is important. Any confirmation numbers or tracking codes received at the time of submission should be readily available, as these can expedite the inquiry process. Having copies of the original Form 941 and the amended Form 941-X on hand provides a comprehensive record of the claim.

Ways to Track Your ERC Claim

Businesses that filed their Form 941-X electronically may be able to confirm submission through their IRS online account or the Electronic Federal Tax Payment System (EFTPS). These platforms indicate receipt of the filing rather than providing detailed processing updates on the credit. The most common and effective method for checking the status of an ERC claim involves contacting the IRS directly by phone.

Businesses can call the IRS Business and Specialty Tax Line at 1-800-829-4933. When calling, have all relevant business and claim information prepared to facilitate the conversation with the IRS representative. Callers should anticipate lengthy wait times due to the high volume of inquiries.

Businesses might also receive updates or requests for additional information from the IRS via mail. Regularly check postal mail for any correspondence related to the ERC claim. In some cases, a tax professional who assisted with the ERC claim, and has a valid Power of Attorney (Form 2848) on file, can inquire about the status on behalf of the business. This can streamline the communication process with the IRS.

Understanding ERC Status Messages

After an inquiry, businesses may encounter various status messages regarding their Employee Retention Credit claim, each carrying a specific meaning. A “Received” status indicates that the IRS has obtained the submitted Form 941-X or other relevant amended returns. Following receipt, the status changes to “Processing,” signifying that the claim is undergoing review by the IRS. This processing phase can be extensive, often taking six to twelve months or even longer, due to the volume of claims and necessary compliance checks.

When the IRS completes its review and validates the claim, the status may update to “Approved.” This indicates that the credit has been authorized and the refund is being prepared for issuance. Subsequently, a status like “Check Mailed” or “Direct Deposit” confirms that the refund has been disbursed. Allow several business days for direct deposits to appear in bank accounts and several weeks for mailed checks to arrive.

In some instances, the status might indicate “Additional Information Requested,” meaning the IRS requires further documentation or clarification to continue processing the claim. A prompt and thorough response to these requests is necessary to prevent further delays. If a claim is “Denied” or “Adjusted,” the IRS sends a detailed letter explaining the reasons for the decision, which may necessitate further action or appeal by the business.

What to Do About ERC Delays or Issues

Given the substantial volume of Employee Retention Credit claims, businesses often experience significant processing delays, with wait times extending beyond six to twelve months. Continuously monitoring the claim status through the previously mentioned methods is helpful for tracking progress. If a refund has been approved but not received within the expected timeframe, or if a claim remains in “Processing” for an unusually long duration without any change, it may be appropriate to contact the IRS Business and Specialty Tax Line at 1-800-829-4933.

When making such an inquiry, ensure all claim details, filing dates, and any prior correspondence are readily available. This preparation helps to make the call more productive. Should the usual IRS channels not resolve a persistent issue or if a delay is causing significant financial hardship for the business, contacting the Taxpayer Advocate Service (TAS) may be an option.

TAS is an independent organization within the IRS that helps taxpayers facing problems they have been unable to resolve through normal IRS procedures. Providing prompt and complete responses to any IRS requests for additional information, such as through Letter 6373, is essential to avoid further delays in the processing of the ERC claim.