Processing your ERC claims now that the shutdown is over

The longest recorded government shutdown is finally over. As many government agencies return to normal business operations, many small business owners still have one burning question: How do I get my employee retention credit (ERC) claims processed with the Internal Revenue Service (IRS)?

Denials and deadlines

If your ERC claim was denied, often through an IRS Letter 105-C, you have two years from the date of disallowance to file a refund suit in federal court to challenge the decision.

If it has been more than six months since you filed your ERC claim and the IRS has not responded, you have three years from the date you filed the amended employment tax return to file a refund suit in federal court.

Based on your specific facts and circumstances, if you do not file by the identified deadline, you will not be entitled to funding. Government shutdowns do not pause the statute of limitations. Moreover, administrative remedies to resolve unpaid funds are quickly becoming unavailable.

Unfortunately, because of the overwhelming number of unprocessed ERC claims and decreased IRS staffing, many employers could be empty-handed unless they take immediate proactive steps. Here are three essential considerations for employers with pending ERC claims.

Statute of limitations on payment

Internal Revenue Code provisions establish the deadline to file a refund claim and the applicable window to file a lawsuit if the IRS doesn’t administratively process the claim.