Unexpected Employee Retention Credit Refund Delays

by | Dec 6, 2021

The IRS is experiencing continued delays

The IRS is currently backlogged with millions of unprocessed payroll tax returns due to the changes in COVID-19 safety protocols and the volume of Employee Retention Credit (ERC) refund requests.

As of November 17, 2021, the IRS posted that there are about 2.4 million unprocessed Forms 941 and approximately 400,000 unprocessed Forms 941-X. Additionally, the IRS advised that they will be processing all Forms 941 before they process the corresponding Forms 941-X. It is also rumored that the IRS may be processing 2020 payroll refunds before 2021 payroll refunds.

To check any new IRS status postings, visit: https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue and scroll down to “Filed a Tax Return”.

How long does it take to receive the ERC refund?

Previously it was expected that after the amended payroll reports have been filed, the IRS would issue refunds within six weeks to six months. We are now encouraging you to plan for a turnaround time of nine to twelve months.

How to check the status of your refund

To check the status of your refund, you can call the IRS at (877) 777-4778. Expect extended wait times. We recommend that the best course of action is to visit the IRS website. Unfortunately, we don’t expect there to be any new or additional information learned from a phone call conversation.

Part 26: Exiting Exit Planning

By: Brian Ragan, Senior Strategic Management Consulting Services The following is part 26 of a multi-part series on The KHA Way, KHA Management Consulting’s Integrated Service Offering. This blog series includes the benefits of using KHA Management Consulting Services...

Part 25: Exit Planning

By: Brian Ragan, Senior Strategic Management Consulting Services The following is part 25 of a multi-part series on The KHA Way, KHA Management Consulting’s Integrated Service Offering. This blog series includes the benefits of using KHA Management Consulting Services...

Part 24: Meeting Cycles

By: Brian Ragan, Senior Strategic Management Consulting Services The following is part 24 of a multi-part series on The KHA Way, KHA Management Consulting’s Integrated Service Offering. This blog series includes the benefits of using KHA Management Consulting Services...

Infrastructure Bill Terminates ERC Earlier Than Expected

On Monday, November 15th, President Biden signed into law the bipartisan Infrastructure Bill. The $1.2 trillion bill included a few tax provisions in the legislation, one significant change being the earlier end date for the Employee Retention Credit (ERC). The ERC...

Part 23: Succession Planning Intro

By: Brian Ragan, Senior Strategic Management Consulting Services The following is part 23 of a multi-part series on The KHA Way, KHA Management Consulting’s Integrated Service Offering. This blog series includes the benefits of using KHA Management Consulting Services...

Part 22: Process Alignment Conclusion

By: Brian Ragan, Senior Strategic Management Consulting Services The following is part 22 of a multi-part series on The KHA Way, KHA Management Consulting’s Integrated Service Offering. This blog series includes the benefits of using KHA Management Consulting Services...