Why The Delay in ERTC Payments?

Many businesses are seeing delays in receiving their Employee Retention Tax Credit payments (ERTC). What is ERTC and why is there such a delay?

ERTC was introduced during the COVID-19 pandemic as a relief for eligible businesses who kept their employees on payroll during the economic decline. This aid from the government ended on December 31st, 2021. However, businesses who met the criteria could still submit their forms. Due to the substantial number of applications submitted, the IRS suspended processing on September 14th, 2023. Why, then, is there still a delay in receiving ERTC payments?

A primary reason for the delay in ERTC payments is the amount of applications being submitted for review. Each application is to be reviewed individually, creating a significant backlog in processing times. Another reason for this backlog is the number of fraudulent claims being submitted. The IRS has put in place secure measures so that only legitimate claims are handled. Although these measures are important, they do result in a greater delay. Even if a claim is true, many businesses make mistakes when filing this credit. Because of this, review times are set back to correct any errors. What can businesses do while they wait?

Although businesses cannot speed up this process, they can actively wait for their credit to come through. One way of doing this is by patiently refraining from submitting multiple claims. This would only add to the backlog as duplicate claims are pinged when they appear. Owners should stay informed about IRS updates to better understand how these claims are processed. The backlog will eventually be resolved. Businesses should also hold on to any important documents that the IRS might potentially need. Being quick to give them any information can help with processing times.

The IRS has addressed this issue and is working to review each claim as efficiently and carefully as possible. However, there is no guarantee this process will end soon. As businesses wait for their credit to process, they continue to be patient, aware of any potential updates, and ready to help when needed.