Our last “Where’s My ERC Refund” update was published almost a year ago in June 2022. Since then, many outstanding ERC refunds have been processed and paid by the IRS with interest, while businesses continue to file additional ERC refund claims. Many of our clients have received a refund for some quarters, but not others, even when they were all filed at the same time. Although the IRS has not published any official guidance, we know they are subjecting larger ERC refund claims to more thorough processing and fraud prevention techniques than smaller refunds.
In June 2022, the IRS reported the total inventory of unprocessed Forms 941-X was approximately 215,000.
As of April 12, 2023, the IRS reports approximately 961,000 unprocessed Forms 941-X. Many of these are not related to ERC refunds but cannot be processed until the related Forms 941 are processed. The backlog of unprocessed Forms 941 is estimated at 150,000.
IRS Processing Delays
The IRS is still struggling with COVID processing delays. Prepare for a 6-month wait to process Form 941-X, or longer, depending on the amount of the refund. Other types of amended and paper-filed returns are still taking longer than pre-COVID timelines.
Many employers across the country have received audit notices related to their ERC refund claims. If your ERC refund claim is selected for audit, you should be prepared to provide documentation supporting eligibility (revenue test and/or full or partial suspension of operations), your wage and credit calculations, and evidence that your ERC eligible wages were not also used for PPP forgiveness (no double dipping).
Checking Refund Status
You can contact the IRS by phone at 1-800-829-4933. Be sure you have your federal identification number for your business as well as a copy of the return(s) with the refund amount noted. Only the business owner, officer or authorized 3rd party with a Power of Attorney can call on behalf of the employer. Be prepared to wait.
Please contact your Dent Moses advisor if you have questions.