How Long Does It Take to Receive an Employee Retention Credit Refund?

When the COVID-19 pandemic hit, many companies were forced to lay off employees or reduce their working hours. As a result, the Employee Retention Tax Credit (ERTC) has become an increasingly important tool for businesses. Initially, it may have taken four to six weeks for employers to receive their ERTC reward. However, due to the backlog of applications filed with the IRS, this has dragged on for several months.

Most employers can expect to receive their refund from the ERTC within six months to a year after filing their return. The ERTC is refundable, meaning that companies can receive a refund if they have already paid their taxes for the year. This will ensure that the prepayment of the credits received by the common law employer is properly reconciled with the employment tax return filed by the third payer for the calendar quarter in which the advance payment of the credits is received. In addition, credit has also been expanded in recent months to cover a wider range of companies and employees. The credit for each eligible employer will be the amount of the credit distributed among the members of the aggregate group based on each member's proportional share of the qualifying salaries that give rise to the credit. Employer F can file a Form 7200 to request a credit or refund of this amount before the end of the quarter (but not for any amount of the employee retention credit that has already been used to reduce the deposit obligation).The IRS website has a page dedicated to the employee retention credit, and the page includes a link to a specific phone number for questions about the credit.

We can help you calculate credits, file 941-X to apply for employee retention credits, review pre-calculated credits, determine requirements for credits, assist with IRS audits to 941-X, and help you with letters from the IRS to help resolve delays in your credits. Fortunately, we have some answers to put your mind at ease and help you check the status of your employee retention tax credit. With a little knowledge and experience, you can process an ERTC application and receive your refund within six months to a year after filing your return.