IRS Pauses Processing of New ERC Claims Until the End of 2023: What This Means for You

Sep 15, 2023

The IRS recently announced that they will be pausing the processing of new Employee Retention Credit (ERC) claims until the end of 2023, starting from September 15, 2023. This news has left many businesses wondering about the implications and what it means for their eligibility to claim this valuable tax credit.

Understandably, this decision has caused some concern among business owners who were planning to take advantage of the ERC to help offset the financial impact of the ongoing pandemic. However, it's important to note that this pause in processing new claims does not mean that the ERC program is being discontinued or that businesses will no longer be able to claim the credit.

Why the Pause?

The IRS has decided to pause processing new ERC claims in order to allow them to focus on reviewing and processing the backlog of claims that have already been submitted. The demand for the ERC has been overwhelming, and the IRS needs time to catch up and ensure that all eligible businesses receive the credit they are entitled to.

In addition, many businesses have received poor advice about their ERC eligiblity and have faced stiff penalties for filing ineligible returns.

This pause will also give the IRS an opportunity to make any necessary updates or changes to the ERC program. As the pandemic continues to evolve, there may be new legislation or guidance that impacts the eligibility requirements or calculation of the credit. By pausing new claims, the IRS can ensure that they are processing claims based on the most up-to-date information.

What Does This Mean for Eligible Businesses?

If your business has already submitted an ERC claim, this pause should not impact you. The IRS will continue to process and review claims that were submitted prior to September 15, 2023. However, if you have not yet submitted a claim and were planning to do so, you will need to wait until the end of 2023 to submit your claim.

It's important to note that the pause in processing new claims does not change the eligibility requirements for the ERC. If your business meets the criteria outlined by the IRS, you will still be able to claim the credit once processing resumes. Take this time to review the eligibility requirements and gather any necessary documentation to support your claim. 

You can start the process of finding out if you qualify here.

What Can Businesses Do in the Meantime?

While the pause in processing new ERC claims may be frustrating for some businesses, it's important to remember that there are still other financial relief options available. Consider exploring other tax credits, grants, or loan programs that may be applicable to your business.

Additionally, this pause provides an opportunity for businesses to review their financial records and ensure that they are in order. Take this time to gather any necessary documentation, review your eligibility, and consult with a tax professional if needed.

Stay Informed

As with any government program, it's important to stay informed and up-to-date on any changes or updates. Keep an eye on the IRS website and other reliable sources for information regarding the ERC and its processing timeline.

Remember, the pause in processing new ERC claims is temporary and is intended to ensure that all eligible businesses receive the credit they are entitled to. While it may require some patience, the ERC can provide significant financial relief to businesses impacted by the pandemic. Use this time to prepare and be ready to submit your claim once processing resumes.

Conclusion

The pause in processing new Employee Retention Credit claims by the IRS until the end of 2023 may cause some inconvenience for businesses planning to claim this valuable tax credit. However, it is important to understand that this pause is temporary and necessary to allow the IRS to catch up on the backlog of claims and make any necessary updates to the program.

Businesses that have already submitted a claim need not worry, as the IRS will continue to process and review those claims. For businesses yet to submit a claim, it is crucial to use this time to gather the necessary documentation and review eligibility requirements.

While waiting for processing to resume, businesses can explore other financial relief options and ensure their financial records are in order. Staying informed and up-to-date on any changes or updates from the IRS is also essential.

Remember, the Employee Retention Credit is still available and can provide significant financial relief to eligible businesses impacted by the ongoing pandemic. Stay prepared and ready to submit your claim once processing resumes at the end of 2023.