(ERC) Employee Retention Credit Processing Times – How Long To Get ERC Refund?
In this video we share our experience on how long it takes to get the Employee Retention Tax Credit refund from the IRS. The Employee Retention Credit processing times may vary, but we share our thoughts on why you should apply for the Employee Retention Credit as soon as possible.
This video is intended for education purposes and should not be taken as legal, financial or tax advice. You should consult with a professional about your unique situation before acting on anything discussed in these videos. Freedomtax Accounting and Multiservices Inc., Freedom Insurance Financial Inc., Freedom Realty Source Inc., and Freedom Immigration International Inc. are providing educational content to help small business owners and individuals become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience. Freedomtax Accounting and Multiservices Inc., Freedom Insurance Financial Inc., Freedom Realty Source Inc., and Freedom Immigration International Inc. or its members cannot be held liable for any use or misuse of this content.
The Employee Retention Tax Credit Is a great program from the IRS which is helping small businesses get thousands of dollars to help them get through this coronavirus pandemic. Once you submit your employee retention tax credit application to the IRS and the forms that you need to send in through the IRS to get the Employee Retention Tax Credit, how long does it take for your business to receive the Employee Retention Tax Credit refund from the IRS? That’s what we’re going to talk about in this video.
Hello from FreedomTax Accounting, we are an accounting firm where we have been providing quality tax and accounting services now for over 20 years. If you’re new to this channel, we provide strategies for small business owners so they can achieve their financial goals.
We are recording this video on November 30th, 2021. We always emphasize the date of these recordings because things can change tomorrow, for example we’re going to share with you our experience with our client on how long they are taking in receiving the employee retention tax credit refund, that can change in the future, but thank God we have been able to help many of our clients get the Employee Retention Tax Credit and let me show you some examples.
This is one of our clients who got a $24,000 check from the IRS; and remember this is per quarter, this quarter this client received $24,000. This client here received $16,000 from the IRS, that’s the copy of the check. This client here received two checks because he applied for two quarters, he got one check for $20,000, another one got $19,000. Remember, this is per quarter. This client did not receive a check, he received the letter saying that he got a credit, because the IRS can either send you a refund check or you’re going to get a letter saying that you have this amount of money as a credit for your payroll taxes; so, is same thing, is still free money from the IRS. Another client received $17,000 for that quarter; another $17,000; and this one received $10,000 for that quarter as well.
As you can see, our clients are starting to get these checks in the mail or this letter from the IRS saying that you have a credit towards your payroll taxes.
Now how long is it taking? In our experience that we have seen so far, once the Employee Retention Tax Credit forms are sent to the IRS, they are taking six to nine months to send you a check or send you the letter saying that you have a payroll tax credit, so they are taking a long time. Now, that timeframe may be longer in the near future; why? We’re at the end of November, tax season is just around the corner, and it’s our feeling that if you apply for the Employee Retention Tax Credit during tax season, you’re going to have to wait longer because the IRS is going to be very busy during their regular tax season work. So, we suggest that if you are interested in applying for the Employee Retention Tax Credit, you apply for it now.
Who is eligible? This is only for employers, so if you are self-employed, if you’re an independent contractor with no employees on payroll, you cannot apply for this Employee Retention Tax Credit, but if you have employees in payroll there are many ways that you can be eligible, so that’s important that you get the consultation, so we can evaluate your case and make sure that you can apply.
The most basic test that you can do to see if you are eligible for the Employee Retention Tax Credit is:
Take your 2020 quarterly sales, compare that with the 2019 quarterly sales. If you find a 2020 quarter where you can at least show a 50% reduction in revenue compared to the same quarter in 2019, you are eligible to get the 2020 Employee Retention Tax Credit. For 2021 is even easier, because for 2021 Employee Retention Tax Credit you just must show that there’s a quarter in 2021 that has at least 20% reduction in revenue compared to the same quarter in 2019.
Now, recently the Biden administration passed the structured bill, where the fourth quarter of 2021 will not be eligible for the employee retention tax credit, but for 2021 you still can get the Employee Retention Tax Credit for the first, second and third quarters of 2021.
Once again, there are other ways of being eligible that are a little bit more complex. We suggest that you contact our office, this is our contact information right below, schedule a consultation and see if you are eligible to get the employee retention tax credit.
Also, we suggest that you at least know how much you’re going to get as an Employee Retention Tax Credit for 2021, why? Because the amount of Employee Retention Tax Credit that you get for 2021 does affect your corporate tax return, so you want to know if you’re eligible and you want to know how much employee retention tax credit for 2021 you are eligible to get before you file your 2021 corporate tax return, because you don’t want to amend it in near future.
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