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Employee Retention Tax Credit

How Long Does It Take To Get Employee Retention Tax Credit Refund

Want to know how to get your ERC refund and its processing time? Learn how long it takes to receive your employee retention credit refund from the IRS.


Employee Retention Tax Credit (ERTC) is a valuable benefit available to employers in the United States. It provides financial relief for businesses that are struggling due to COVID-19, and can be used as an incentive for retaining employees who would otherwise have been laid off due to economic hardships.

But how long does it take to get ERTC refunded? This article will provide a comprehensive overview of the process associated with applying for and receiving an ERTC refund. From understanding eligibility requirements, knowing which documents need to be submitted, and exploring possible ways to expedite the process - readers will gain insight into what they should expect when seeking their own ERTC funds.

The first step towards receiving an ERTC refund is determining whether or not you meet the criteria set forth by the IRS. In order to qualify, employers must prove that their business was financially impacted by COVID-19; meaning, they experienced either a partial or full suspension of operations during any quarter between March 12th, 2020 and December 31st, 2021.

Additionally, employers must also demonstrate that gross receipts were at least 20% lower compared to the same quarter from 2019. Once eligibility has been established, employers will then need to gather all necessary documentation required for application approval.

The forms vary depending on the type of entity filing for reimbursement but typically include proof of payroll costs incurred within each eligible quarter such as wages paid out on behalf of employees and related taxes reported on Forms 941s filed quarterly with the IRS. After successful submission of these documents, applicants may receive notification regarding approval status within several weeks time.

Overview of Employee Retention Tax Credit

The Employee Retention Tax Credit (ERTC) is an incredible opportunity offered by the federal government to eligible employers to help with payroll costs in response to the effects of COVID-19. It provides a fully refundable tax credit for 50% of wages paid up to $10,000 per employee between March 12, 2020 and December 31, 2020.

This incentive can be used on top of other relief options from the CARES Act such as the Paycheck Protection Program or deferring payment of employer’s share of Social Security taxes. To make this program available to more businesses, Congress had recently expanded rules around eligibility requirements and modified how funds are allowed to be utilized.

This tax credit helps employers retain their employees without having them take pay cuts during difficult times. Employers who qualify for the ERTC then receive a dollar-for-dollar reduction in certain employment taxes equal to half of what they pay out in wages up to a maximum amount set forth by law.

The ultimate goal being that it will enable businesses affected by COVID-19 closures or related economic issues remain afloat while still keeping its employees employed at full wage rates.

Through this policy initiative, many companies have already taken advantage of the valuable benefits associated with receiving these funds back; however, there are still some questions surrounding just how long it takes for employers to get their refunds. In order to answer those questions we must first understand what qualifies an employer for these credits and how they go about obtaining them.

Eligibility Requirements

When it comes to getting the employee retention tax credit refund, there are certain eligibility requirements that must be met. 

First, a qualifying employer must have experienced a complete or partial disruption of commercial activities as a result of directives from the proper governmental body restricting trade, travel, or group gatherings as a result of Covid 19.

Secondly, employers must experience either (1) an outstanding decrease in gross receipts; or (2) fully or partially suspend their trade or business during any calendar quarter. Lastly, employers with more than 100 employees who do not meet the above criteria may still qualify if they can demonstrate at least a 50% reduction in quarterly wages paid compared to the same quarter in 2019.

In order for employers to take advantage of this incentive and potentially receive refunds quickly on their qualified expenses, they need to understand all applicable rules and regulations thoroughly and keep meticulous records throughout the process:

  • Determine Qualifying Wages Paid During 2020

  • Document Qualifying Employer Business Closures Due To Governmental Mandates

  • Calculate Eligible Credit Amounts Based On Payroll Costs And Gross Receipts Decline For Each Quarter

  • File Form 941 With Documentation Proving That Your Company Satisfies All Requirements Of The Employee Retention Tax Credit Program

  • Due to the complexity of these rules and regulations, it is best practice for businesses of all sizes to consult with a financial professional before filing for the ERTC program in order ensure accuracy when claiming credits against payroll taxes owed.

    It's also important to note that depending on your situation you may get immediate relief through reduced deposits rather than waiting until filing time for refunds – so make sure you check out both options available! Filing correctly will help determine how long it takes to receive the employee retention tax credit refund - which could be quite fast if done properly!

    Filing Process

    The process for filing for the employee retention tax credit refund is relatively straightforward. First, employers must determine their eligibility by considering whether they meet the criteria laid out in IRS guidance and/or legislation. Employers should also consider any state-specific requirements or restrictions.

    Once an employer has established that they are eligible to claim the credit, they can file Form 941 to report wages and other payroll information related to the credit. 

    This form will allow employers to either adjust prior quarterly deposits or request a refund of those deposits. After submitting this form, employers may need to provide additional evidence such as proof of total qualified wages paid during the period covered by the credit if requested by the IRS.

    Once all necessary paperwork is completed and submitted, it typically takes between two and three weeks before employers receive a decision from the IRS regarding their eligibility for a refund of their Employee Retention Tax Credit payments.

    The amount of time it takes depends on how quickly businesses submit their forms and documents and how efficiently their applications are processed through the system. It's important for employers to keep track of when deposits were made so that, if approved, refunds can be received in a timely manner.

    Calculating the Amount of Refund

    The process for calculating the amount of refund you can expect from an employee retention tax credit depends on how much you have paid your employees and which quarter or quarters are eligible. The IRS will calculate the amount based on wages, health care expenses, and qualified sick leave wages that have been paid to each qualifying employee during the period covered by the credit.

    When applying for this credit, employers must provide a detailed breakdown of their payroll costs associated with each qualifying employee in order to properly calculate the amount of refund they may receive. This includes providing information such as gross pay, federal income taxes withheld, FICA taxes withheld, and any other applicable taxes.

    Additionally, employers must also provide evidence of any health care expenses incurred throughout the time period under consideration and any qualified sick leave wages paid out during that same time frame. Once all relevant information has been provided to the IRS, it is then up to them to determine the exact amount of employee retention tax credits available for reimbursement.

    Generally speaking it usually takes at least 30 days for refunds to be processed; however if additional paperwork is required or there are errors or discrepancies in documents submitted then processing times could be extended further. Ultimately though, once all requirements have been met by both parties involved - employer and IRS - refunds should arrive shortly thereafter.

    IRS Processing Time Frame

    The Internal Revenue Service (IRS) processes employee retention tax credit refund requests within a certain time frame. Generally, refunds are issued in around four weeks after the original filing date of the return. The timeline may vary depending on factors such as how taxpayers file their returns and if they have any errors or omissions that require further processing by the IRS. In some cases, it can take up to eight weeks for a refund to be issued.

    If you’ve filed your return but haven't received your refund yet, you can check its status online using the Where's My Refund? tool available through the IRS website. This tool will provide an estimated completion date for when your refund should arrive and also show any errors or issues with your application that might delay things.

    It is important to note that most taxpayer refunds will be processed faster than this average timeframe due to advances in technology and automation; however, if there are complications with your refund request—such as missing information or incorrect address provided—it could take longer for you to receive it.

    Therefore, it is essential to double-check all information before submitting your return and regularly monitor progress via the Where's My Refund? tool so you know when to expect your money back from the IRS.

    How To Check Refund Status

    Checking the status of an Employee Retention Tax Credit (ERTC) refund can be a simple process. The first step is to contact the Internal Revenue Service (IRS). Depending on when the ERTC was claimed, it may take up to six weeks for the IRS to process and issue refunds. Once contacted, the IRS will provide taxpayers with an individualized timeline for their specific refund request.

    The second step in checking one’s ERTC refund status is to access the “Where's My Refund?” tool on www.irs.gov. This online portal allows taxpayers to enter information such as social security number, tax filing status, and amount of expected refund into a form that provides updates about their pending return or any issues that have caused delays with processing. Additionally, through this same portal users can also sign up for email notifications regarding changes in refund statuses related to their returns.

    Another way to check on an ERTC refund is by contacting customer service at 800-829-1040; however, due to high call volumes wait times may be long and customers should anticipate significant wait times before speaking with a representative during peak seasons like tax season or other holiday periods.

    In order to make sure calls are answered quickly, customers should have all relevant information ready before calling including Social Security numbers and/or Individual Taxpayer Identification Numbers of both spouses if applicable, so that agents can answer questions more efficiently.

    ERC Qualification Estimates Form

    ERC Qualification Form
    Estimate Your Potential ERC Amount


    The Employee Retention Tax Credit is a tax incentive designed to encourage businesses affected by the pandemic to retain their employees. Employers must have had their operations partially or completely suspended as a result of COVID-19-related government orders in order to be eligible for this credit, or at least a 50% reduction in gross receipts over the same quarter from the prior year.

    After filing with the IRS and determining the amount of refund available, taxpayers can expect processing times ranging from 4-8 weeks.

    In order to check on the status of their claim, taxpayers may use “Where's My Refund?” on irs.gov or call 800-829-1040. It is important that taxpayers understand all eligibility requirements before submitting an application as claims are subject to review and audit by the IRS. Furthermore, they should ensure they submit accurate information as any mistakes could lead to additional delays in receiving their refund.

    The employee retention tax credit provides much needed relief for business owners who have suffered financially due to closures resulting from COVID-19 restrictions. Although it takes some time for refunds to process, it is worth taking advantage of this opportunity if your business meets eligibility criteria and you need help retaining employees during these challenging times.