At this time, the Internal Revenue Service (IRS) is not providing any specific estimates for when the Employee Retention Credit (ERC) will be paid out.
However, they have acknowledged that there are currently over 1.8 million paper payroll tax returns waiting to be processed. Based on this information, it is estimated that the payout could take anywhere from 4 to 7 months from the time the returns were filed. It is important to note that the IRS can be unpredictable, especially during the ongoing COVID-19 pandemic, so this timeframe is not guaranteed.
Despite this uncertainty, it is important to understand that businesses will ultimately receive the ERC payout. The IRS is legally obligated to adhere to the program outlined in the three stimulus bills, and the funding for the credit comes directly from the IRS and U.S. Treasury. This means that the ERC cannot run out, like other stimulus programs such as the Paycheck Protection Program (PPP). The ERC payout is cash that is due to your business and will be paid out at some point.
References
- Internal Revenue Service (IRS)
https://www.irs.gov/coronavirus/employee-retention-credit - The CARES Act
https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf - American Institute of CPAs
https://www.aicpa.org/content/dam/research/research/taxpolicyandeconomics/downloadabledocuments/2021/2021-03-03-employee-retention-credit.pdf - Employee Retention Tax Credit: What You Need to Know
U.S. Department of the Treasury
https://home.treasury.gov/system/files/136/Employee-Retention-Tax-Credit.pdf