Where Is My ERC? How to Check Your Refund Status
Concerned about your ERC refund? Learn to check its status, understand processing factors, and resolve common challenges for your business.
The Employee Retention Credit (ERC) was a refundable payroll tax credit designed to help businesses retain employees during the COVID-19 pandemic. Many businesses applied for this credit, leading to concerns about refund status and timelines. This article explains processing delays, how to check claim status, and how to address common issues.
Understanding ERC Processing Delays
The IRS faces significant challenges processing ERC claims. Over 2.5 million claims have been filed, creating an unprecedented workload. By November 2023, the backlog of unprocessed Forms 941-X, used for ERC claims, exceeded one million.
Manual review of complex eligibility criteria and evolving guidance contributes to extended processing times. Staffing limitations and resource constraints further bottleneck the process.
The IRS has increased scrutiny on fraudulent claims, particularly from “ERC Mills.” This enhanced compliance review means even legitimate claims may face longer processing as the IRS separates valid applications.
A moratorium on processing new ERC claims, implemented September 14, 2023, exacerbated delays. This extended the processing goal for pre-moratorium claims from 90 to 180 days, with potential for longer reviews.
Checking Your ERC Claim Status
Businesses awaiting an ERC refund have limited direct electronic tracking tools. The most reliable method is to contact the IRS directly by phone. The IRS business helpline, (800) 829-4933, is the primary contact for ERC inquiries.
When calling, have specific information ready to facilitate the inquiry:
Your Employer Identification Number (EIN).
The tax periods for which amended returns were filed.
The date Forms 941-X were mailed.
The IRS “Where’s My Refund?” tool is for individual tax returns and does not track ERC refunds on Form 941-X. Expect long wait times when calling due to high call volume.
Confirm successful delivery of the original Form 941-X, as these amended returns must be mailed. Using a delivery service with tracking helps verify receipt. A phone call can confirm if the claim has been received and entered into the IRS system.
Addressing Common ERC Claim Issues
Businesses may encounter various issues after checking ERC claim status. One common scenario is receiving an IRS notice, such as an Information Document Request (IDR) or an audit notice (e.g., Notice 6612). These indicate the IRS needs more information to verify eligibility.
Respond promptly to IRS inquiries, often within a specified timeframe like 30 days for an audit notice. Gather all requested documentation, which may include:
Payroll records.
Original and amended Forms 941.
Proof of operational suspension due to government orders.
Evidence of a decline in gross receipts.
Paycheck Protection Program (PPP) loan documents.
Provide a clear, detailed explanation supporting the original claim.
If a claim is fully or partially disallowed (e.g., via Letter 105-C or 106-C), businesses can dispute the decision. This involves submitting a detailed written explanation and supporting documents to the IRS, with an option to appeal to the IRS Independent Office of Appeals.
If a refund check is expected but not received, file Form 3911 with the Bureau of the Fiscal Service for investigation.
For complex issues like audit notices, disallowances, or concerns about claim accuracy, seeking assistance from a qualified tax professional (e.g., accountant or tax attorney) is advisable. They can help navigate IRS procedures, review documentation, and ensure compliance.