The health industry was not the only one shaken by the COVID-19 outbreak. Businesses in the United States were also fighting for their survival, and the economy was in a state of crisis. Now that things have settled down, life is returning to normal, and businesses around the world are beginning to reopen their doors.
The government established the Employee Retention Tax Credit (ERTC) program as part of the CARES Act to provide a hand to businesses struggling to help them regain their financial footing.
What is Employee Retention Tax Credit?
Employee Retention Tax Credit is a government initiative introduced as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to encourage business owners/employers to continue paying their employees during 2020.
Initially, the ERTC was introduced with a value of 50% of the qualifying employee pay, but it was capped at $10,000 for any employee, with a maximum credit of $5,000 available for wages earned between March 13, 2020, and December 31, 2021.
Simply put, the ERTC was devised to incentivize and reward businesses that continued to pay their workers and to encourage enterprises to do so. However, it has been revised with time to bring the total proportion of eligible earnings up to 70% by 2021. The maximum allowable compensation for each employee is now $10,000 every quarter, up from the previous limit of $10,000 per year.
Even though the ERTC has several advantages, the National Federation of Independent Business (NFIB) revealed that in 2020, just 8% of business owners adopted ERTC, and only 10% did so in 2021.
Considering the following stats, the planned date for the retroactive period (January 1, 2022) was pushed back to October 1, 2021. Already 11 months late? Don’t worry; you can still apply for a no-strings-attached Employee Retention Tax Credit by submitting Form 941-X.
Are You Eligible For ERTC? Check Your Status Now!
"*" indicates required fields
Employee Retention Credit Refund Timeline
Initially, Congress passed the Infrastructure Investment and Jobs Act on November 5, 2021. Due to the timetable for the ERTC, the Internal Revenue Service (IRS) had originally intended to give a refund anywhere between six weeks and six months after filling an updated payroll report.
However, this timeline has been changed. Even this somewhat big span seems to provide some glimmer of optimism presently. At this point, you should anticipate a turnaround time of nine to twelve months.
Common Struggles with the ERTC Timeline
The most recent information from the IRS indicates that the amended Form 941 can be eligible for a refund between six and ten months (from the date it was filed). Those submitting their taxes for the first time and those who have already submitted might have to wait up to 16 months or even longer for a return. Since further review is required before large refunds (those more than one million dollars) may be issued, these reimbursements might experience further delays.
Believe it or not, claiming the ERTC refund is not as easy as it seems. Additionally, the above observation shows that, just like any government initiative, the Employee Retention Tax Credit is no new to the common struggles, like waiting for months and months. Being an eligible business owner applying for an ERTC refund in 2022, here’s what to pay attention to or look out for along the way.
Have you ever tried your hand at the world’s favorite puzzle game, Tetris? If so, you will probably remember that there was no easy way to “win.” With each passing level, it just got faster and faster, and similar considerations apply for an ERTC refund. Not that it takes your mind off other things; rather, it never comes to an end. The idea is simple: work with an ERTC expert to get things done.
Before filling for the ERTC, experts like ERTC Express will identify potential pathways toward employer eligibility and investigate the fact pattern exhaustively. This may involve detecting mandatory government orders to shut down completely or partially, as well as the examination of gross receipts. Nevertheless, you can always bet on the company for expert advice.
Where is Your ERTC Refund?
The Internal Revenue Service (IRS) has not hidden the fact that it is experiencing a backlog in processing millions of tax returns, including payroll tax returns. An unanticipatedly large amount of requests for refunds of Employee Retention Credits (ERC) is one of the factors contributing to the backlog. As a result, many businesses have had to wait far longer than anticipated for their return.
The Internal Revenue Service has roughly 2.5 million unprocessed Forms 941 (ERC) and 395,000 unprocessed Forms 941-X as of November 17, 2021. In addition, the IRS informed everyone that they would be processing all of the applicable Forms 941 before they process any of the Forms 941-X associated with them. Bear in mind that the Internal Revenue Service (IRS) still has to process an undetermined number of payroll refunds for 2020 before moving on to requests for 2021.
At first, it was anticipated that the Internal Revenue Service (IRS) would give an Employee Retention Tax Credit refund somewhere between four and twelve weeks after a revised payroll report was submitted. Even this large window of opportunity seems hopeful at this point. Nevertheless, it would be best if you began preparing for a turnaround time of nine to twelve months.
How to Apply for ERTC Refund – A Walkthrough
Believe it or not, claiming the ERTC refund is not as easy as it seems. There is a lot of paperwork involved and eligibility to meet. Therefore, working with an ERTC expert like ERTC Express is your best bet. If you’re still trying to understand the ERTC refund process, don’t worry; we’ve got you covered. Let us walk you through ERTC Express’ five-step process.
- Complete the Questionnaire: Start with the ten simple questions to begin your ERTC claim.
- Upload Data: Upload PPP documents, 941 returns, and raw payroll data on EE’s secure portal.
- Credit Calculation: Get an accurate calculation of the credit you can receive from the IRS.
- Application Package: Get ERTC expert help filing the 941-X Amended payroll returns.
- Get Paid from IRS: Receive an email from the IRS with your very own ERTC check.
The Final Cut
So there you have it: everything you need to know about how long it takes to get an ERTC refund. Due to many changes and the distinctions in the ever-evolving Employee Retention Tax Credit Program, you may still have questions about how to claim ERTC. Check with an ERTC expert to ensure you get all the help your business needs for 2022 and the upcoming years.
So what are you waiting for? Don’t let this chance to obtain payroll aid pass you by. In the following years, the incentives you get through Employee Retention Credits may be a breakthrough in your company’s growth.
Join hands with an ERTC expert like ERTC Express to get comprehensive audit help if the IRS ever contests any of your ERTC claims. From assessment and preparation to filings, we take care of everything that comes in your way when claiming Employee Retention Tax Credits.
Are You Eligible For ERTC? Check Your Status Now!
"*" indicates required fields
Frequently Asked Questions
Whether you’re looking for information regarding how long it will take to get an ERTC refund or just want to understand how the whole refund process works, we hope this article helped. However, we’re not done just yet. As a bonus, we’ve taken the time to answer some questions regarding Employee Retention Tax Credits and ERTC refunds.
Why is Employee Retention Credit Refund Delayed?
The IRS may take six to ten months to examine applications for compensation benefits intended to keep employees on the payroll amid COVID-19. Companies who wish to claim the credits have been forced to dig deeper into accounts, prolonging their recovery. According to the employers, auditors, and payroll providers, the pauses are caused by IRS delays and changes in government policy.
How Much Money Can Businesses Receive Via ERTC?
Based on the number of W2 workers on the payroll, company owners and employers may be eligible to earn up to $26,000 for each employee, but this amount is subject to qualifying requirements. You may qualify for a substantial tax credit via the ERTC. For those who don’t know, this money has already been sent to the IRS as part of the payroll taxes required for W2 workers.
How to Check the Status of the Employee Retention Credit?
You may verify the status of your refund by calling the Internal Revenue Service at (800) 829-4933. Pressing either the 1 or 2 key will toggle between English and Spanish. After selecting your language of preference, go to step 3 to start with Employment Tax. Note that you may be placed on hold for 30-60 minutes because there are not enough agents at the Internal Revenue Service to handle all the calls.