Therefore, most employers can expect to receive their refund from the ERTC within eight to 10 weeks after filing their return. However, if an employer hasn't yet filed your return, you should expect to receive your refund within two to three months after filing. In our experience, it takes approximately nine months to receive a refund from the IRS after filing a modified Form 941X. 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.
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. Businesses can still apply for the ERC by filing an amended Form 941X (Quarterly Federal Payroll Tax Return) for the quarters in which the company was an eligible employer. From now on, the only way to apply for the ERC is to file an amended Form 941X (Quarterly Federal Payroll Tax Return) for the quarters in which the company was an eligible employer. Instead, the employer must reduce wage deductions on their income tax return for the tax year in which they are an eligible employer for the purposes of the ERC.
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. For more information on the employee retention credit, visit Cherry Bekaert's ERC Guidance Center or contact Martin Karamon. ERC credits are calculated based on the qualifying wages paid to employees during their status as an eligible employer. 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.