FAQ
The ERC is a refundable payroll tax credit, paid as a check mailed by the IRS. This credit rewards businesses by refunding up to $26,000 for each W-2 employee they kept on payroll during the pandemic. Â
The ERC is neither a loan nor a grant. It’s a tax credit sent as a check directly from the IRS which does not need to be paid back.
Your ERC refund does count as taxable income — it’s just like any other income for your business. You will have to pay business income taxes on your ERC refund check at the end of the quarter.
Due to a backlog at the Internal Revenue Service (IRS), it typically takes about six to nine months to receive the ERC refund check.
You can apply for the ERC until April 25th, 2025 by submitting an amended payroll tax return claiming the Employee Retention Credit for the specific quarters in which your company qualifies. However, you must file your amended 941-X tax return within three years of the date you filed your original 941 payroll tax document. This means that waiting longer to file will result in a smaller credit refund.
You can call the IRS and check on the status of your refund. They would provide a general update if they received the form. However, the IRS generally has long hold times due to a shortage of phone operators.
Yes, you can still claim the ERC if your business never fully shut down due to government mandates.
Yes, you can still claim the ERC if your business did well during the pandemic. In fact, you can qualify for the ERC even if your business grew during this time.
Yes, your business can receive an ERC tax refund despite receiving Paycheck Protection Program (PPP) funds in the past. The money you received for PPP will be taken into account when calculating your ERC refund.
Yes, you can receive ERC funds if you are self-employed, but only for wages that you paid your employees during 2020 and 2021.
Yes, startup businesses founded in 2021 and earlier can qualify for the ERC through the Recovery Startup Credit. This gives new businesses the opportunity to receive government assistance funds, however, the means to qualify are different and the credit amounts vary.