Why Checking Your IRS ERC Application Status Matters
Understanding your IRS ERC application status is critical for business owners waiting on refunds that could total millions. Here is how to check your status right now:
Quick Answer: How to Check Your IRS ERC Application Status
- Call the IRS Business and Specialty Tax Line at 1-800-829-4933 (or 267-941-1000 from outside the U.S.).
- Have your information ready: EIN, business name, address, tax quarters filed, and Form 941-X submission dates.
- Expect long wait times: IRS agents have limited information about specific ERC claims.
- No online tool: The “Where’s My Refund” tool does not work for Form 941-X claims.
- Average processing time: Currently 548 days, with over 400,000 claims in the backlog.
As of October 2024, the IRS is working through a backlog of over 400,000 ERC claims worth approximately $10 billion. The average claim has been sitting in the IRS inventory for 548 days.
The Employee Retention Credit was created under the CARES Act to help businesses keep employees on payroll during the pandemic. Eligible businesses could claim up to $26,000 total per employee. However, the IRS paused processing new claims in September 2023 due to fraud concerns. While they have resumed processing for certain periods, each claim requires manual review, leading to massive delays.
I’m Santino Battaglieri, and I’ve worked in the ERC space for years, helping businesses steer the complex process of tracking their IRS ERC application status. Through SFG Capital, we’ve purchased and funded over $500 million in ERC claims, giving us unique insight into what works when dealing with IRS delays.
This guide will walk you through how to check your status, what IRS responses mean, and what to do if your claim is disallowed or lost.
How to Check Your IRS ERC Application Status
Unlike standard income tax refunds, there is no online portal to track your IRS ERC application status. ERC claims are filed on Form 941-X, which operates outside the typical automated refund system. The most direct way to check your status is to call the IRS.
Information Needed for Your IRS ERC Application Status Call
Gather these documents before calling the IRS Business and Specialty Tax Line at 1-800-829-4933 (or 267-941-1000 from outside the U.S.):
- Employer Identification Number (EIN): Your business’s unique tax ID.
- Business Name and Address: Must match IRS records exactly.
- Tax Quarters Filed: Specific quarters (e.g., Q2 2020, Q3 2021).
- Submission Dates: When you mailed each Form 941-X.
- Copies of Forms 941-X: Keep copies of every amended return.
- IRS Notices: Any letters received regarding your ERC.
Be prepared for long hold times. IRS agents often rely on general timelines rather than real-time updates. For more details, see our guide on How to Check ERC Refund Status and Don’t Be Left Waiting: How to Track Your Employee Retention Credit Refund.
Understanding IRS Responses Regarding Your IRS ERC Application Status
When you reach an agent, their response regarding your IRS ERC application status might be vague:
- “Your claim is in process”: Your Form 941-X is in the queue but hasn’t been fully reviewed.
- “Your claim is under review”: The claim has moved past initial intake and is being scrutinized.
- “A refund has been issued”: Your claim is approved, and a check is on the way.
- “Your claim is being held for further verification”: The IRS needs more info or is conducting compliance screening.
- “Your claim has been disallowed”: The IRS determined you are ineligible; you should receive Letter 105-C.
As of October 2024, the average age of claims in the inventory is 548 days. Some tax professionals can access the IRS transcript system for clearer insights. Learn more in The Waiting Game: Understanding Your ERC Claims Journey Through the IRS.
Why Your ERC Refund is Taking So Long
As of October 2024, the IRS faces a backlog of over 400,000 ERC claims valued at $10 billion. Each claim requires manual review, and the agency’s focus on fraud prevention has slowed the process significantly. ERC promoter claims were even added to the “Dirty Dozen” list of tax scams.
You can read more about the processing moratorium in this IRS Moratorium Announcement and our article The Great ERC Wait: Understanding Your Delayed Employee Retention Credit.
The Impact of the IRS Processing Moratorium
In September 2023, the IRS paused processing new ERC claims to implement compliance measures. In August 2024, the IRS resumed processing for claims filed between September 14, 2023, and January 31, 2024. Legislative actions like the One Big Beautiful Bill Act (OBBBA) also introduced penalties for promoters and restricted new claims filed after January 31, 2024. The IRS now categorizes claims by risk level (high, low, or unacceptable), which dictates review intensity. See IRS Resumes Processing for more.
Common Reasons for Extended Processing Delays
- Incomplete Information: Errors on Form 941-X cause the IRS to set the claim aside.
- Large Refund Amounts: Substantial claims trigger extra layers of verification.
- Compliance Screening: Every claim is cross-referenced for red flags.
- Promoter Involvement: Claims prepared by aggressive firms are flagged for scrutiny.
- Individual Processing: Each Form 941-X is treated as a separate claim, meaning quarters may be paid at different times.
For more details, see The Waiting Game: Understanding and Overcoming ERC Refund Delays.
What to Do if Your ERC Claim is Disallowed or Lost
If your claim is disallowed, the IRS sends Letter 105-C. You can request an administrative appeal or file a suit. If a check was mailed but not received, file Form 3911 to initiate a refund trace. The Taxpayer Advocate Service (TAS) can also help if you face financial hardship. See Expediting Your ERC Refund: What You Need to Know.
| Feature | ERC Claim Withdrawal Program | ERC Voluntary Disclosure Program (VDP) |
|---|---|---|
| Purpose | Stop processing an unpaid ineligible claim. | Repay received ineligible funds at a discount. |
| Claim Status | Filed but not yet paid. | Filed and paid. |
| Deadlines | Open for unpaid claims. | Closed (Nov 22, 2024). |
| Repayment % | 0% (if withdrawn before payment). | 80% or 85% of erroneous ERC. |
| Penalties | Avoids future penalties/interest. | Avoids penalties/interest on repayment. |
Adjusting Wage Expenses After a Disallowance
Claiming the ERC requires reducing wage deductions on your income tax return. If your claim is disallowed, you don’t necessarily need to amend prior returns. IRS guidance allows businesses to increase wage expenses on the tax return for the year the disallowance becomes final. This “recapture” approach simplifies the process. Refer to IRS Guidance on Disallowance.
Navigating the ERC Claim Withdrawal Program
The Claim Withdrawal Program is for businesses that realize they are ineligible before the claim is paid. It helps avoid audits and penalties. Generally, you must submit a formal request to withdraw the Form 941-X. For more, see ERC Help: Everything You Need to Know About the Employee Retention Credit.
Frequently Asked Questions about ERC Status
Can I use the “Where’s My Refund” tool for ERC?
No. The “Where’s My Refund” tool is for income tax returns (Form 1040, 1120). ERC claims are filed on Form 941-X, an amended employment tax return, which requires manual review and is not integrated into the automated tracking system. For more, see How Long Until Your ERC Refund Arrives? A 2026 Update.
What is the current IRS backlog for ERC claims?
As of October 2024, the backlog is over 400,000 claims worth $10 billion. The average wait is 548 days due to the massive volume, manual review requirements, and fraud prevention screenings. Check IRS Form Processing Times for general updates.
How do I report an ERC scam or promoter?
Use Form 14242, Report Suspected Abusive Tax Promotions or Preparers. Provide details about the promoter’s claims and contact info. Reporting helps the IRS stop fraudulent activities. See our Employee Retention Credit Specialist Guide for more on avoiding scams.
Conclusion
Navigating your IRS ERC application status is a challenge for businesses in Travis County and nationwide. With a backlog of 400,000 claims and an average wait of 548 days, the path to receiving funds is slow and complex.
While the ERC is a vital lifeline, waiting over a year for a refund is often not feasible. SFG Capital helps businesses in Travis County and Austin, TX, expedite their refunds through advances and buyout options. We work on a performance-based fee, ensuring you get expert assistance without upfront costs.
Don’t let the IRS backlog stall your business. If you need to access your ERC funds now, visit our ERC Funding Process page today.