How to Check the Status of Your ERC Claim
Waiting for your ERC refund? Understand the journey of your Employee Retention Credit claim, from inquiry to expected timelines, for clarity on its progress.
The Employee Retention Credit (ERC) is a refundable tax credit established to encourage businesses to retain employees during the economic disruptions caused by the COVID-19 pandemic. Businesses that qualified for this credit could receive significant financial relief by claiming it against their payroll taxes. Many businesses applied for the ERC, and after submitting their claims, they frequently need to monitor the application’s progress or verify the status of their expected refund.
Ways to Check Your ERC Status
Taxpayers have several avenues to check the status of their Employee Retention Credit claim. While a dedicated online tracking tool specifically for ERC claims does not exist, businesses can utilize general IRS resources and other direct communication methods.
One primary method involves contacting the Internal Revenue Service (IRS) directly via their Business and Specialty Tax Line. The phone number for this line is 800-829-4933, and it operates Monday through Friday, from 7 a.m. to 7 p.m. local time. An IRS representative can provide information regarding the current status of an ERC claim if the necessary business details are readily available.
While the IRS “Where’s My Refund?” tool is commonly used for individual tax refunds, it is not designed for tracking business-specific ERC claims. However, businesses may be able to verify that their ERC-related forms were received by checking their IRS online account or the Electronic Federal Tax Payment System (EFTPS) if they filed electronically. These online platforms generally confirm the submission of forms rather than providing a detailed status of the refund processing itself.
Another practical step involves consistently monitoring the business’s bank accounts for direct deposits. If the ERC refund is issued as a direct deposit, this is the ultimate confirmation of a processed and paid claim. Alternatively, businesses should routinely check their mail for paper checks or any correspondence from the IRS. The IRS typically sends notices or requests for additional information via postal mail, which can indicate the status or highlight any issues with the claim.
If the ERC claim was prepared and submitted by a tax professional or accounting firm, contacting them is often the most efficient approach. Tax preparers may have direct lines of communication with the IRS or access to specific portals that provide more detailed information on their clients’ behalf, especially if they hold a Power of Attorney.
Details Needed for Status Inquiries
Before initiating any inquiry regarding an Employee Retention Credit claim, gather specific documentation and information. The Employer Identification Number (EIN) is the business’s unique tax identification number. Alongside the EIN, the business’s full legal name and current address, as registered with the IRS, are necessary for verification purposes.
Taxpayers should have a record of the specific tax period(s) for which the ERC was claimed. For example, this could be Quarter 2 2020, Quarter 3 2021, or other applicable periods. Knowing the form(s) filed for the ERC, such as Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, is important as this is the primary form used for amending payroll tax returns to claim the credit.
The date(s) when the ERC claim(s) were filed should be noted. Additionally, the amount of the ERC claimed for each specific period is required.
Retaining proof of filing, such as copies of the filed forms and certified mail receipts if the claim was sent by mail, is important. Any prior correspondence received from the IRS related to the ERC claim should also be kept on hand.
Navigating ERC Processing Timelines
The processing of Employee Retention Credit claims has been subject to significant delays. Businesses should anticipate a considerable waiting period from the time their claim is submitted until a refund is issued. Current processing times can range from several months to well over a year due to various factors impacting the IRS.
The sheer volume of ERC applications submitted has created a substantial backlog, with millions of claims awaiting review. The complexity of the ERC eligibility criteria often necessitates manual review processes, which further slows down processing. Increased scrutiny by the IRS to combat fraudulent or erroneous claims has led to more rigorous verification procedures, including a moratorium on processing new claims implemented in September 2023. Larger claims, in particular, may undergo additional review and face longer delays.
During this waiting period, a “no status” or “processing” update typically indicates that the claim is in the queue and moving through the IRS system. The IRS has categorized claims into different risk levels, with lower-risk claims potentially being processed more quickly, while higher-risk or medium-risk claims may be subject to more in-depth evaluations.
If a delay becomes excessive, or if a business has not received any communication for an extended period, follow-up actions may be warranted. Consulting with a tax professional is also an option if the claim is particularly complex or if there are significant, unexplained delays.
Businesses might receive various types of notices from the IRS during the processing timeline. These could include CP notices, which are computer-generated notices, or letters requesting additional information to support the claim. Receiving such correspondence indicates that the claim is actively being reviewed and that the IRS requires further details to proceed.