How to Check the Status of Your IRS Employee Retention Credit (ERC) Refund

The Frustrating Reality of IRS Refund Delays

As of April 2022, the IRS had over 23 million unprocessed returns waiting for manual review – some of which dated back to 2021. The agency has been candid that the combination of the pandemic’s disruptions and being understaffed has created a “nightmare” backlog situation. 

Commissioner Chuck Rettig even delivered the harsh truth that most crisis response operations won’t be fully recovered until the end of 2023.

So what does this mean for ERC refund delays specifically? Unfortunately, you can likely expect to wait at least 6-10 months to receive your refund payment after filing. And if you’ve just recently filed for the ERC, that wait could stretch up to a year or more based on current processing times.

While incredibly frustrating, understanding the reality of these delays can help manage expectations as you track your refund status. 

There’s a good chance checking constantly won’t change or accelerate anything given the IRS’s mountain of work to get through.

Your Best Options for Checking IRS ERC Refund Status

Even with the backlogs, you still have a few choices for attempting to get updates on your ERC refund. None of them are perfect, but staying on top of the status is better than wondering in the dark.

Try the IRS Tele-Tax Line (But Prepare for Hold Times)

One option is to go old-school and call the IRS helpline at 877-777-4778. You’ll need to have some key information handy:

• Your Social Security Number
• Your filing status
• The exact refund amount you’re expecting

Just be prepared – you’ll likely be on hold for a long time given the IRS’s chronic staffing shortages. 

During last year’s tax season, a mere 11% of the 195 million incoming calls actually made it through to speak to a human being. Over 80% of callers couldn’t even get through to the automated system!

There’s a decent chance you’ll experience some profoundly rage-inducing hold music before either getting disconnected or making it through to the next step of the process. Maybe have a calming playlist queued up instead?

The “Where’s My Refund?” IRS Online Tool

For checking electronically filed returns, the IRS’s “Where’s My Refund?” tool is generally a better bet than the phone line. You can use this portal to track your refund status within:

• 24 hours of e-filing your return
• 4 weeks of mailing a paper return

To get status updates, you’ll need to enter:

• Your Social Security Number
• Your filing status
• Your exact refund amount

The tool will then provide updates on your refund’s progress through the following 3 stages:

1. Return Received
2. Refund Approved
3. Refund Sent

While checking the tool can feel futile when no progress has been made for months, it at least prevents you from spending hours on hold. Just try not to obsessively hit refresh!

Check the “Amended Return Status” Page (For Amended ERC Claims)

If you originally filed your taxes, but then later submitted an amended 941-X return claiming the ERC, you’ll need to follow a different process for checking that amended status.

The IRS’s Amended Return Status tool asks for:

• Your Tax Return Transcripts
• The exact amount of your anticipated refund
• Your Zip Code

Considering how long the IRS is taking to process original returns, you can expect the backlog to be even more extreme for amended filings and refunds. The tool will at least indicate if your amended return has been received and is in the pipeline.

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Other Tips for (Potentially) Speeding Up Your Refund

No magic tricks or special secrets can fast-track an ERC refund from the IRS given the backlog situation. However, they have provided one piece of guidance that could help some employers access their anticipated credits more quickly.

For employers that have made payroll tax deposits for other quarters beyond the ERC claim period, the IRS is essentially allowing you to keep and access a portion of those deposited funds as an advance. This is permitted up to the amount you calculate the ERC to be worth for your business.

While this could provide some relief by not having to wait for the IRS refund to materialize, there are risks to miscalculating the ERC credit amount you’re entitled to. 

If you underestimate and access too much from those payroll deposits, you could face penalties, interest payments, and other costly headaches down the line.

Aspect	Informal “Advance”	Official Refund Payment
Speed of Access	Quick access to funds, addressing urgent cash flow needs promptly	Subject to IRS processing times, potentially causing delays
Risk of Miscalculation	Possibility of miscalculating ERC amount and facing penalties	Calculation based on official IRS guidelines, minimizing risks
Penalties/Interest Charges	Risk of facing penalties or interest charges if calculations are incorrect	No penalties or interest charges if calculations are correct
Formality	Informal arrangement, potentially quicker and less bureaucratic	Official process with required documentation and procedures
Certainty	Immediate access to funds, but final ERC amount may need adjustment	Final amount determined by IRS, ensuring accuracy and compliance
Avoidance of Delays	Reduces delays associated with IRS refund processing times	Subject to delays in IRS processing and verification procedures
Final ERC Calculation	Still need to properly calculate final ERC claim amount	Final calculation done by IRS based on submitted documentation

Given the complexities and potential downsides, many businesses may understandably feel more comfortable waiting for the official IRS refund instead of attempting to access credits early through payroll withholdings. If you do choose that route, proceed with extreme caution and documentation.

“The IRS is taking the pandemic into account to alleviate employer responsibilities in this area, but there’s still a compliance obligation they are expecting.” – Jessica Jeane, J.D., VP of Employment Policy at FirstWatch

Should You Hire Experts to Handle Your ERC Claim & Refund?

Let’s be honest – filing taxes is rarely an enjoyable experience. Sifting through IRS rules, completing complex forms, and calculating credits is enough to induce panic attacks for most of us. And when you add in the ambiguity around a relatively new credit like the ERC, it can quickly feel overwhelming.

For those suffering from tax bureaucracy-induced migraines, professional tax assistance can be worth its weight in gold. By leveraging an expert’s experience and knowledge, you’ll maximize your available credits while avoiding costly mistakes. 

And at a time when the IRS is facing unprecedent delays, having tax pros on your side can streamline the process as much as possible.

Think of it like taking your car to an auto mechanic when there’s a concerning noise coming from the engine. You could spend countless hours scouring internet forums and vehicle repair videos attempting a DIY fix. 

You may even get it right. But if you make one small mistake, it could lead to an even bigger (and more expensive) problem down the road. Most of us would agree it’s simply smarter and less stressful to put the job in the hands of a certified mechanic who knows exactly what they’re doing.

At the end of the day, working with experienced tax professionals allows you to arm yourself with two valuable assets: expertise and time. While nothing can make the IRS process move quickly right now by default, having experts in your corner provides the highest likelihood of:

• Claiming your maximum eligible credits upfront
• Submitting optimized, accurate forms and documentation
• Avoiding needless errors that could delay processing further
• Freeing up your time and energy to focus on your business

Paying for professional tax services requires an investment. But it’s one that could ultimately pay off significantly by getting you more credits while steering clear of potential penalties, interest charges, or even greater financial losses down the line from DIY mistakes.

“A good tax professional allows you to control outcomes rather than being at the mercy of an understaffed, overworked IRS.” – Erica Quintero, Senior Tax Manager at CPA Practice Advisor

While understandably tempting to tackle the ERC process on your own, handing it over to specialists is well worth considering if you want a refund issued quickly and accurately. 

Their expertise can mitigate major headaches and optimize credits at a time when the IRS likely won’t have much patience for correcting errors or miscalculations by individual claimants.

In Conclusion

Awaiting an IRS refund can feel like cruel torture, especially when it’s a substantial credit you were relying on like the Employee Retention Credit. 

Nobody enjoys the “hurry up and wait” game, but patience continues being a necessity as the agency works through their unprecedented backlog.