How to Track Your ERC Refund Status and What to Expect
Navigate the process of checking your Employee Retention Credit refund status. Get clear guidance on tracking progress and understanding the next steps for your business.
The Employee Retention Credit (ERC) was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to encourage eligible employers to retain employees during the COVID-19 pandemic. This refundable tax credit applies to qualified wages and certain health insurance costs paid to employees. Many businesses that initially did not claim the ERC on their original Form 941, or incorrectly reported information, have since filed Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, to claim their rightful credit or correct previous errors. As a result, numerous businesses are currently awaiting their ERC refunds.
Information to Gather Before Tracking
Before attempting to track your ERC refund, it is important to compile specific information and documents. Having these details readily available will streamline the tracking process. You will need your Employer Identification Number (EIN), which is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify your business entity.
You should also identify the exact tax period(s) for which the ERC was claimed, specifically the quarter and year. The exact refund amount claimed for each respective tax period is also necessary.
Locate the date you filed each Form 941-X, as this date is used by the IRS to initiate the processing timeline. Any acknowledgment numbers or confirmation details received when the Form 941-X was submitted can also be helpful.
Tracking Your Refund Online
The primary method for tracking your ERC refund involves using the IRS’s “Where’s My Amended Return?” online tool. This tool is specifically designed for amended returns, including Form 941-X. You can access this tool directly on the IRS website.
Once on the “Where’s My Amended Return?” page, you will be prompted to enter specific information. You will need to input your Employer Identification Number (EIN) in the designated field. Next, select the tax year for which you filed the amended return claiming the ERC.
The tool will also ask for your date of birth, which for business entities is often represented by the date the business was established or a similar identifying date, though the primary identifier for businesses is the EIN. After entering these details, you can submit your query to view the status of your Form 941-X and associated ERC refund.
Other Ways to Check Your Refund Status
If the online tool does not provide the information you need, or if you prefer speaking with a representative, you can call the IRS directly. The main phone number for business tax inquiries is generally 1-800-829-4933.
Another option is to contact the tax professional or firm that prepared and filed your ERC claim. They often have direct communication channels with the IRS or can assist you in interpreting any notices received. Your tax professional can also help if there are complexities in your claim or if the IRS requires additional information.
Understanding Refund Statuses and What to Do Next
When you check your ERC refund status, you may encounter several messages from the IRS. A status like “Refund Received” or “Refund Approved” indicates that the IRS has processed your Form 941-X and determined your eligibility for the credit. “Refund Sent” means the payment has been issued.
Typical processing times for Form 941-X, which includes ERC claims, can vary significantly. Generally, you should allow 8 to 12 weeks for processing, though in some cases, it could extend up to 16 weeks or longer due to backlogs. The IRS has acknowledged a backlog of unprocessed amended employment tax returns, which can contribute to delays.
If your refund is delayed beyond these typical timelines or if the status indicates an issue, you might receive a notice from the IRS requesting additional information or clarification regarding your claim. It is important to respond promptly to any IRS correspondence, providing all requested details. If no notice is received, and the delay is substantial, you may need to submit a formal inquiry to the IRS or consult with a tax professional for guidance on further actions.
When the refund is issued, it is typically sent either via direct deposit to the bank account provided on your Form 941-X or as a paper check mailed to your business address. If the refund amount you receive differs from the amount you claimed, carefully review any accompanying IRS notices or statements. This discrepancy could be due to adjustments made by the IRS during processing, and understanding the reason is important for your records.