Understanding the reasons behind the hold-up and what you can do while you wait

If you’re a business owner waiting for your Employee Retention Tax Credit (ERTC) claim to be processed, you’re likely growing frustrated. The ERTC was meant to provide financial relief to businesses hit hard by the pandemic, but for many, that relief has been delayed. The good news? You’re not alone—and the IRS is actively working to speed up the process. 

Why Is There Such a Long Delay? 

Several factors are contributing to the holdup in processing ERTC claims, and understanding these can help you manage expectations while awaiting payment. 

  • High Volume of Claims: Since the ERTC has been a business lifeline, the IRS has been flooded with applications. Each claim needs to be reviewed individually, and with thousands of businesses applying, a significant backlog has been created. 
  • Fraud Prevention Measures: Unfortunately, the ERTC has become a target for fraudulent claims. As a result, the IRS has increased scrutiny and added layers of verification to ensure that only legitimate claims are processed. While these measures are necessary, they are also adding to the delays. 
  • Complexity of the Credit: The ERTC is not a simple tax credit. Many businesses have submitted claims with errors or missing documentation, which requires additional review time. Even if your claim was submitted perfectly, the overall complexity of processing these credits means things are moving slower than many had hoped. 
  • IRS Resource Challenges: Like many organizations, the IRS has faced its own staffing issues, which has further slowed down the process. While they are bringing on more personnel to handle the backlog, it will take time to see significant improvement. 

What’s the IRS Doing to Address the Delays? 

Recognizing the frustration and financial strain these delays are causing, the IRS recently announced they are accelerating work on ERTC claims. They are prioritizing processing legitimate claims while continuing to watch for potential fraud. This is a balancing act—one that requires patience from business owners but ultimately ensures the credit is distributed fairly and accurately. 

What Should You Do While Waiting? 

While the delay can feel like it’s out of your control, there are a few steps you can take to stay proactive: 

  • Avoid Filing Multiple Claims: Refrain from submitting additional claims. Doing so could actually slow things down even more, as duplicate claims complicate the process and might flag your application for further review. 
  • Keep Your Documentation Ready: The IRS may request additional information if there’s any question about your claim. Ensuring your payroll records and financial documents are organized and ready to go will help you respond quickly if contacted. 
  • Stay Informed: The IRS provides updates about ERTC processing on its website. Keeping tabs on these updates will give you a clearer picture of where things stand and when payments might begin to flow more steadily. 
  • Consult your Tax Professional: If you’re unsure whether your claim is in good standing, checking in with your CPA or tax advisor can provide some peace of mind. They can verify that your claim was filed correctly and ensure there aren’t any issues you may have overlooked. 

Is There Anything that can Speed Up the Process? 

Unfortunately, the speed of your payment is largely out of your hands. The IRS has its own timeline, and as frustrating as that may be, the best course of action is to stay patient and prepared. Reaching out to the IRS may provide updates on your claim’s status, but repeated inquiries are unlikely to move things along faster. 

While the IRS is working to address the backlog, there’s no clear-cut timeline for when you’ll receive your payment. In the meantime, your best strategy is to stay informed, have your documentation ready and be patient. 

If Adams Brown filed an ERTC claim on your behalf, and you have questions or need further updates, please don’t hesitate to reach out directly to our team or fill out a contact form on our website. We’re here to support you through this process. If Adams Brown did not file your claim, it’s a good idea to contact your accountant or provider for updates and guidance on your specific case.