Table of Contents:
Table of Contents:
You may have heard about the Employee Retention Credit (ERC) — also known as the payroll tax refund — that can potentially put hundreds of thousands of dollars back into your business. Maybe you’ve already done some homework on the process and visited our ERC Q&A blog to learn about the eight most common ERC questions.
Whether you apply yourself or with an ERC company like Innovation Refunds (IR), you may wonder when you’ll receive your refund in the mail. Below, we’ll discuss the process and the time frames for each step so you can be confident you’re making the right decisions for your business.
Step 1: Fill Out the ERC Application
The time it takes to fill out your application can depend on who you’re working with and what information is required. At Innovations Refunds, we ask for:
- Contact Information
- Company Information
- Covid-19 Information
- Payroll Information
- Healthcare Statements (if applicable)
- PPP Information (if applicable)
It’s easy to get started and see if you qualify for ERC assistance.
Step 2: Find Out if Your Business May Qualify & Gather Documents
While you can check your eligibility for yourself, one of the benefits of working with IR is that we understand the complicated nuances when filing for the ERC. The refund does span from 2020 through the first three quarters of 2021, but there are slightly different IRS regulations for these two years.
ERC Application Qualification Guidelines and Time Frame
2020 ERC qualification guidelines:
- You had 100 or fewer employees on your payroll
- You kept employees on your payroll
- Your business was, at least, partially shut down because of a government order OR
- Your business’s revenue declined by 50% or more during any quarter when compared to the same quarter in 2019.
2021 ERC qualification guidelines:
- You had 500 or fewer employees on your payroll.
- You kept employees on your payroll.
- Your business was, at least, partially shut down because of a government order OR
- Your revenue declined by at least 20% for any of the first three quarters of 2021 when compared to the same quarter in 2019.
Once you fill out your ERC application with Innovation Refunds, you’ll learn if your business qualifies for ERC assistance. Our network of tax professionals will check your eligibility after a careful review of your application and uploaded documents.
ERC Required Documentation Uploads
For the Innovations Refunds team to file your ERC claim with the IRS, you’ll first need to upload the required documentation.
Required business documentation uploads:
- IRS Form 941: Employer’s Quarterly Federal Tax Return
- Monthly Payroll Ledger
- Monthly Group Healthcare Statement
- PP1 & PPP2 Loan Forgiveness Applications
- Government Order to Shutdown or Suspend Operations
If applicable, you may need to show that your business operations were compromised due to the pandemic. You are in charge of how quickly IR receives your documents and can begin processing your claim request.
Step 3: Filing Your ERC Claim With the IRS
Filing with the IRS can take some time because it’s crucial to make sure all forms are filled out correctly so the IRS accepts your ERC claim. If you work with the tax professionals at Innovation Refunds, you can expect your business’ claim to be filed in four to six weeks. Innovation Refunds has your back during the entire process — with no upfront cost, a refund specialist assigned to your account, and audit protection at no additional cost.
Step 4: Wait for Your ERC Application Approval
Once the IRS has received your required documents, it could take anywhere from six to nine months to be issued your refund.
IRS delays are caused by:
- The changes in procedures at the IRS to address COVID-19 safety protocols, including IRS employees working remotely
- The sheer volume of refund requests
- Shortage of IRS employees to process requests
Luckily, the IRS has announced its intention to hire more employees. Hopefully, these plans will help speed up the process. If you’re using Innovation Refunds to file your ERC refund, we’ll be by your side every step of the way. We’ll keep you updated and be available to answer any questions during this time and after you receive your business’ refund.
From the ERC Application to Growing Your Business
Innovation Refunds takes four to six weeks to process your ERC application because we aim to maximize the refund and get your money from the IRS the first time we file. While doing it yourself or allowing your own CPA to process the claim is an option, Innovation Refunds empowers small and medium-sized businesses just like yours to take full advantage of the ERC program. Once you have uploaded your documents, we will stay on top of tracking it, allowing you to focus on running your business.
If you kept employees on your payroll for 2020 and 2021, your business may be eligible for a payroll tax refund. Ready to get your business growing?
