Check ERC Refund Status Online, Scams, Timeline, Verification Phone Call, Update

Check ERC Refund Status Online, Scams, Timeline, Verification Phone Call, Update

ERC Refund Status Online 2024

The Employee Retention Credit (ERC), also known as the Employee Retention Tax Credit or ERTC, is a refundable tax credit designed for specific eligible businesses and tax-exempt organizations that had employees and faced challenges during the COVID-19 pandemic. Eligibility criteria vary depending on the timeframe for which the credit is claimed. It’s important to note that the ERC is not applicable to individuals.

Employee Retention Credit (ERC) :

The Employee Retention Credit (ERC) is a tax credit introduced during the COVID-19 pandemic to support employers who continued paying their employees. Eligible employers include those who:

• Continued paying employees during government-mandated shutdowns,
• Experienced a decline in gross receipts during specified eligibility periods in 2020 and 2021, or
• Qualified as a recovery startup business during the third or fourth quarters of 2021.

Eligibility Highlights

Criteria for Eligible Employers : 

• Shut Down by Government Order: Eligible if shut down by a government order due to COVID-19 during 2020 or the first three quarters of 2021.
• Decline in Gross Receipts: Eligible if experienced the required decline in gross receipts during the eligibility periods.
• Recovery Startup Business: Qualified as a recovery startup business for the third or fourth quarters of 2021.

Claiming the ERC :

• Eligible employers can claim the ERC on an original or adjusted employment tax return for a period within the specified dates.
• Employers that didn’t claim the credit initially can file adjusted employment tax returns to claim the credit.

What are the eligibility questions and steps ?

Eligibility Questions	Next Steps
1. Did you operate a trade, business, or tax-exempt organization and have employees whom you paid wages between March 13, 2020, and Dec. 31, 2021?	– If yes, proceed to #2. – If no, you are not eligible for ERC. If claimed incorrectly, refer to Part C.
2. Did your business experience the required decline in gross receipts during 2020 or the first three quarters of 2021?	– If yes, you may qualify for ERC. Verify that your decline meets requirements. For more details, see IRS.gov/ercdecline. If eligible, skip to Part B. – If no, proceed to #3.
3. Are you claiming the ERC due to supply chain issues?	– If yes, exercise caution. Review IRS.gov/ercsupply and legal memo (AM-2023-005) for guidance. Ensure your situation aligns with criteria outlined in #4, then proceed to Part B. If claimed incorrectly, go to Part C. – If no, move to #4.
4. Was your business fully or partially suspended by a government order due to the COVID-19 pandemic during 2020 or the first three quarters of 2021?	– If yes, you may be eligible for ERC. Ensure you have documentation of the government order and how it impacted your operations. For more details and examples, visit IRS.gov/ercqualifying. Proceed to Part B. – If no, go to #5.
5. Were you a recovery startup business (RSB)?	– If yes, you may qualify for ERC. Visit IRS.gov/ercrecovery for details. RSBs are limited to $50,000 in ERC per quarter and can claim for the third and fourth quarters of 2021. If eligible, proceed to Part B. – If no, you are not eligible for ERC. If claimed incorrectly, refer to Part C.

Limitations

ERC Limitations :

• The ERC cannot be claimed on wages reported as payroll costs for PPP loan forgiveness.
• Payroll costs associated with shuttered venue operators grants or restaurant revitalization grants are not considered qualified wages for ERC purposes.

Definitions of Eligibility Terms

• Refer to IRS Notices for detailed definitions of eligibility terms.

How to Claim the ERC ?

• Eligible businesses can claim the ERC by filing adjusted employment tax returns.
• If filing Form 941-X to claim the ERC, remember to adjust your deduction for wages accordingly in your income tax return.

How do I Check my ERC Refund Status ?

• Many small business owners are relying on their Employee Retention Credit (ERC) refund claim for operational support.
• The money from the ERC refund could serve as a much-needed lifeline, whether for fueling growth or catching up on pandemic-related debt.
• Unfortunately, the Internal Revenue Service (IRS) does not offer a convenient online tool for checking the status of ERC refunds, unlike personal income tax refunds.
• Despite some online resources suggesting otherwise, the IRS has not confirmed the availability of an online tracking system for ERC refunds.
• There are only two possible ways to check your ERC refund status.

Calling The IRS :

• The most direct method to check your IRS ERC refund status is by calling the IRS at 1-877-777-4778.
• If you filed independently, calling the IRS is the only option available for checking your refund status.
• However, contacting the IRS may result in difficulty reaching a live representative, as many business owners have experienced long hold times.
• Alternatively, you can try reaching out to the IRS Business Specialty & Tax Line at 1-800-829-4933 if you encounter challenges in reaching a live agent.
• An IRS agent can provide a status update only if your Form 941-X has been processed. If you recently submitted it, it may not have been received or entered into the system yet.
• Be prepared to provide identifying information, including your legal name, filing status, federal identification number, relationship to the business, business postal address, year of formation, and type of tax return filed for the firm.

Complete Process of Applying for ERC 

Step 1 : Checking Your Eligibility

ERC Eligibility Checklist

1. Operational Status: Did you operate a trade, business, or tax-exempt organization with employees and pay wages to them between March 13, 2020, and December 31, 2021?
   • Note: Household employers are not eligible for ERC.

Step 2 : Claiming the ERC if Eligible

If you meet the eligibility criteria outlined in Part A, you may qualify for the ERC based on the provided information. Ensure you maintain thorough records documenting wages paid, gross receipts, government orders, and other required documents. If assistance is needed, consider working with a trusted tax professional.

• Your claim may not be processed immediately but will be dated and held until the IRS resumes processing new ERC claims. A moratorium on processing new claims was announced by the IRS on September 14, 2023. For updates and additional information, visit IRS.gov/erc.

Step 3 : Resolving an Incorrect ERC Claim

If you mistakenly claimed the Employee Retention Credit, you can utilize the ERC claim withdrawal process outlined on IRS.gov/withdrawmyerc if you haven’t received the credit or haven’t cashed or deposited an ERC check.

• Requesting a withdrawal means asking the IRS not to process your entire adjusted return, including your ERC claim. If accepted, the claim will be treated as if it was never filed.
• For those who received the ERC incorrectly before December 21, 2023, and cashed or deposited the check or received it as a credit applied to a tax period, the ERC Voluntary Disclosure Program is available. This program allows participants to repay only 80% of the ERC they received. Details can be found on IRS.gov/ercvdp.
• If the withdrawal process or the ERC Voluntary Disclosure Program is not applicable, you can still file another adjusted return to reduce the ERC claim amount or make other adjustments.

Printable Checklist for IRS Partners

If a printable version of this resource is needed to assist constituents, clients, or others in determining ERC eligibility, refer to the Employee Retention Credit Eligibility Checklist.

Beware of ERC Scam Promotions

Warning Signs :

• Unsolicited Contact : Be cautious of unsolicited ads, calls, emails, or texts from unknown sources.
• Instant Eligibility Determination : Statements claiming that eligibility for the ERC can be determined within minutes.
• Upfront Fees : Avoid large upfront fees to claim the credit.
• Refund Anticipation Loans : Refrain from accepting offers of refund anticipation loans.
• Fee Based on Refund Amount : Be cautious of tax preparers charging fees based on the amount of the ERC claimed.
• Pre-qualification Statements : Statements asserting qualification for the credit before discussing your tax situation.
• Pressure to Submit Claim : Avoid pressure to submit a claim without proper consideration, as incorrectly claiming the credit may lead to repayment along with penalties and interest.

Risks :

• Misrepresentation of Eligibility : Some promoters may misrepresent eligibility requirements.
• Identity Theft Risk : Using such companies could put you at risk of identity theft.
• Incorrectly Claimed Credits : There’s a risk of someone claiming a portion of an incorrectly claimed credit, leading to repayment obligations.

Additional Information :

• For detailed information about ERC scams, refer to IRS News Release IR-2023-105.
• Verify eligibility requirements before engaging with ERC promoters.

OFFICIAL WEBSITE >> Employee Retention Credit >> irs.gov / coronavirus/ employee-retention-credit