ERTC Refund Delays: Why They Happen and What You Can Do

The Employee Retention Tax Credit (ERTC) has been a financial lifeline for businesses that kept employees on payroll during the COVID-19 pandemic. However, many businesses that applied for ERTC refunds are facing significant delays, with some waiting months or even over a year to receive their refunds.

If your ERTC refund is delayed, you’re not alone. The IRS backlog and additional compliance checks have left many business owners frustrated and uncertain about when they’ll receive their money.

In this guide, we’ll explain:
✔ Why ERTC refunds are delayed
✔ What you can do to check your refund status
✔ Steps to speed up the process and avoid common mistakes

Understanding why these delays are happening can help you navigate the system and take the right steps to get your refund faster.

1. Why Are ERTC Refunds Delayed?

The IRS is experiencing significant backlogs due to a variety of factors. Below are the main reasons why your ERTC refund may be delayed:

🚨 1. IRS Processing Backlog

The IRS received millions of ERTC claims in a short period, creating a massive workload for the agency.

📌 Key Issue:

• ERTC claims are processed manually, which means longer wait times.

• Some businesses have waited 6-12 months (or longer) for refunds.

💡 What You Can Do:
✔ Check your IRS refund status regularly (explained in Step 2 below).

🚨 2. IRS Compliance Checks & Fraud Prevention

With the rise of ERTC fraud, the IRS is closely reviewing claims to ensure accuracy.

📌 Key Issue:

• Scammers & fraudulent filings have caused the IRS to slow down processing.

• Businesses with incomplete or incorrect documentation face additional delays.

💡 What You Can Do:
✔ Ensure your paperwork is accurate to avoid additional review.
✔ Be cautious of ERTC “mills” that push businesses to file false claims.

🚨 3. Errors or Missing Information on Your Application

📌 Key Issue:

• Mistakes in payroll calculations or business information can cause IRS delays.

• Common errors include:

  • Incorrect wage calculations

  • Mismatched Employer Identification Numbers (EINs)

  • Overlapping payroll funds from PPP and ERTC

💡 What You Can Do:
✔ Double-check your ERTC claim with a tax professional.
✔ Keep copies of all payroll records and IRS correspondence.

🚨 4. Amended Payroll Tax Returns (Form 941-X) Take Longer

Most businesses claim ERTC refunds retroactively by filing an amended payroll tax return (Form 941-X).

📌 Key Issue:

• The IRS processes amended returns more slowly than regular tax filings.

• Each amendment requires manual review by IRS agents.

💡 What You Can Do:
✔ If you haven’t filed yet, apply ASAP to get ahead of the backlog.
✔ Track your submission date so you can follow up if needed.

2. How to Check the Status of Your ERTC Refund

If you’re experiencing ERTC refund delays, it’s important to check your status and ensure your claim is still being processed.

✅ Step 1: Call the IRS ERTC Refund Hotline

The IRS has a dedicated phone line for ERTC inquiries:

📞 IRS Refund Status Number: (800) 829-4933

💡 What to Ask the IRS:
✔ Confirm that your claim was received and is being processed.
✔ Ask if any additional documentation is required.
✔ Request an estimated timeline for processing.

✅ Step 2: Check the IRS “Where’s My Refund” Tool

• Visit: www.irs.gov/refunds

• Enter your EIN and tax period information

• View your refund status

💡 Note: The IRS tool may not show ERTC refund details immediately—it primarily tracks income tax refunds, but it’s still worth checking.

✅ Step 3: Request an IRS Transcript

📌 An IRS Account Transcript can help confirm if your return has been processed.

📍 How to Request It:

1. Go to www.irs.gov

2. Select "Get Your Tax Record"

3. Choose "Account Transcript"

4. Enter your business EIN & tax year

💡 If your transcript shows “adjustment” or “processed,” your refund should be issued soon.

3. How to Speed Up Your ERTC Refund

While you can’t force the IRS to process claims faster, you can take proactive steps to avoid additional delays.

✅ 1. Ensure Your Documentation is Complete

✔ Double-check payroll tax records to avoid errors.
✔ Keep copies of Form 941-X and all supporting documents.
✔ Verify that your ERTC claim does not overlap with PPP payroll expenses.

✅ 2. Respond Quickly to Any IRS Requests

✔ If the IRS requests additional information, respond ASAP.
✔ Missing paperwork can extend delays by months.

💡 Pro Tip: Call the IRS directly if you receive a request to avoid processing delays.

✅ 3. Work With a Trusted ERTC Specialist

✔ A tax expert can help fix errors that cause delays.
✔ Professionals can assist with filing appeals or tracking claims.
✔ Avoid scams—only work with legitimate ERTC consultants.

🚨 Warning: Beware of companies guaranteeing “instant approval” or charging high upfront fees.

4. What to Do If Your ERTC Refund Is Taking Too Long

If your refund is significantly delayed, consider the following options:

📌 Option 1: Contact the Taxpayer Advocate Service (TAS)

• TAS is an independent IRS organization that helps businesses facing excessive delays.

• Visit: www.taxpayeradvocate.irs.gov

💡 When to Use TAS:
✔ If your refund is delayed for more than 12 months.
✔ If you haven’t received an IRS response after multiple inquiries.

📌 Option 2: Request IRS Interest on Delayed Refunds

If the IRS takes more than 45 days to process a refund, they may owe interest on the delayed amount.

💡 How to Request Interest:
✔ Call the IRS and ask if interest applies to your case.
✔ Check your final refund check—if interest was added, it will be listed separately.

Stay Informed and Proactive

The ERTC refund process is slow, but businesses that stay informed, track their claims, and respond to IRS requests quickly can reduce further delays.

💡 Key Takeaways:
✔ Delays are due to IRS backlogs, fraud prevention, and manual processing.
✔ Call the IRS or check online tools to track your refund status.
✔ Ensure your documentation is complete and free from errors.
✔ Consider working with a tax professional if your claim is delayed.
✔ Explore IRS resources like the Taxpayer Advocate Service for extreme delays.

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