Question 1

I want to learn more about the ERC, where can I read the guidance?

Accepted Answer

For the most up to date IRS guidance, click here.

The IRS posted guidance on numerous occasions. Most notably, you should read Notice 2021-20, Notice 2021-23, Notice 2021-49, Notice 2021-65, and Rev Proc 2021-33.​​ These notices can be found here.

Question 2

How long will it take to receive my credit?

Accepted Answer

Historically it’s taken anywhere from 6-8 months, however, the IRS has recently put a pause on processing new ERC claims until at least December 31, 2023. However, as of March 1st, 2024 this pause is still in effect.

The IRS will continue processing previously filed claims, and has increased the minimum 90 day processing time to 180 days to enhance further compliance review. They have been quoted that they are processing around 1,000 per week, compared to 40,000 per week prior to the pause.

Due to heightened concerns within the IRS about ineligible claims you may receive Letter 6612. This letter will require documentation substantiating you are an eligible employer. Your ERC is on hold pending your reply, if you do not reply, your ERC will be discarded.

There is a phone number you can call to obtain a status update: 800-829-4933 Option 1, Option 3.

Question 3

How will I receive my credit?

Accepted Answer

You will receive a check mailed to the address that the IRS has on file for your business. You will receive one check per quarter that you have claimed the credit for. Be sure to check your mail consistently. 
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Do not complete a mail forwarding at the USPS as they do not forward treasury checks. You must complete any address changes through the IRS and we would recommend not changing any addresses until you receive all of your credits.

Question 4

What are the tax consequences and filing requirements?

Accepted Answer

Once you receive the credit, you should let your tax preparer know that you received your credit. They will need to reduce your wage expense by the amount of the credit received, for the year that the credit was for. In addition, part of the check will include interest, interest should be claimed in the year the check was received. Exact details can be found in Notice 2021-49.

Once the 941x is filed you should let your tax preparer know what to expect, depending on the size of the refund check, you can amend your taxes ahead of time. However, if there is a large tax bill due to the credit amount, you may decide to wait until you receive the funds.

You may file a protective refund claim with your amended return(s) to protect your statute of limitations. Please speak with your tax preparer about this when completing your amendments, and please be mindful of the statute of limitations to complete your amendment(s).

Shell Consulting Group, LLC is not a CPA firm or law firm and this should not be considered tax, accounting, or legal advice.

Question 5

What do I have to do with the credit once I receive it?

Accepted Answer

There are no specific requirements, you are free to do as you wish with the credit. You can use it for working capital, payroll, or ongoing expenses.

Question 6

How long is the statute of limitations?

Accepted Answer

Under current law, the statute of limitations does not reset in the case for an amended return. Therefore, the IRS reserves the right to audit an ERC claim with the following deadlines:

2020: April 15, 2024
2021 Q1 Q2: April 15, 2025
2021 Q3: April 15, 2027

Notwithstanding any other statute of limitations, the government has two years from when it pays an employee retention credit refund to bring suit to recover the refund if it later determines the taxpayer was ineligible.

Question 7

I need to change my address, what should I do?

Accepted Answer

To ensure you receive your mail from the IRS and the Treasury Department, you need to file the appropriate forms with the IRS.

Form 8822-B needs to completed and mailed to the IRS.

If you file a mail forwarding with the USPS, you will not receive your checks.

Question 8

When is the deadline to file for ERC?

Accepted Answer

As of January 19th 2024:

The deadline for 2020 claims is 4/15/2024
The deadline for 2021 claims is 4/15/2025

There is pending legislation that would move the deadlines for all ERC claims to Jan 31, 2024. HR 7024. Due to this we are no longer assisting new clients with claims for ERC past this date.

Frequently Asked Questions