According to the most recent information from the IRS, the revised Form 941 that has already been filed could expect a refund between 6 and 10 months from the filing date. People who are submitting the application now or who have already filed it may have to wait up to 16 months or more to receive a refund. The 941 forms filed electronically had an IRS processing time of one month. Original forms 941 filed on paper are generally processed within 3 to 4 months.
If your Form 941 request that you originally filed hasn't been reimbursed, it's time to contact the IRS or ask a professional to review Form 941 for potential errors in your request. Companies that used PayNortheast as their payroll provider could choose an instant tax credit that provided a portion of the refund of the employee retention tax credit each time the payroll was processed. Brief background: If you haven't looked at the employee retention credit (ERC), you may be eligible for a payroll tax credit that has resulted in significant refunds. While the IRS has made progress in recent years in terms of online tracking and access to information for taxpayers, those systems do not provide any information on the processing time of ERC refund requests in amended payroll tax returns.
Many companies have already received the refund of the employee retention tax credit by using the instant tax credit offered by the IRS through the PayNortheast payroll service. Despite the bad news about the repayment deadline, employers who qualify for the ERC should continue to consider filing a modified payroll tax return to apply for the benefit. Legislative changes allowed many employers to retroactively request ERC on amended payroll tax returns, which must be filed on paper and processed by hand by specially trained IRS personnel. While one of the objectives of the ERC was to provide funding to compensate for employee-related costs (and, therefore, maintaining jobs), the inevitable staff shortfall (such as the one suffered by the SBA as a result of the Paycheck Protection Program) means that, sadly, employers will not receive the funds until long after the crisis has abated.
All eligible PayNortheast payroll customers received employee retention tax credit refunds from the IRS several weeks after the end of each quarter, giving them a clear advantage over companies that were still awaiting reimbursement.