Stay informed on the latest Employee Retention Tax Credit developments and learn actionable strategies to guide your clients through IRS delays and financial challenges.
Are your clients experiencing delays in receiving their Employee Retention Tax Credit (ERTC) refunds, leaving them uncertain about their financial relief? Navigating ERTC claims during ongoing IRS processing delays can be daunting, but you can provide the clarity and guidance they need.
This article offers the latest updates and practical strategies to help you support your clients through these challenges. Here’s what you’ll gain:
- Insights into the most recent IRS updates on ERTC processing and their client impact.
- A breakdown of the key factors contributing to refund delays.
- Proven approaches to managing client expectations effectively during this time.
- The advantages of partnering with PrestigePEO are to simplify ERTC claims and enhance overall HR efficiency.
With this knowledge, you’ll be prepared to help your clients secure their ERTC funds while uncovering additional opportunities for financial relief and long-term stability.
Recent ERTC Updates
The IRS is actively addressing a significant volume of ERTC claims and has implemented several measures to address the backlog and ensure compliance:
Third-Party Consolidated Process
To streamline the resolution of incorrect claims, the IRS introduced a consolidated claims process for third-party payers, including organizations like PrestigePEO. This initiative allows these entities to withdraw ineligible claims while retaining those that qualify, allowing legitimate claims to be handled more efficiently.
Accelerated Processing
As of October 2024, the IRS has prioritized the processing of approximately 400,000 ERTC claims, collectively worth about $10 billion. Refund checks are being issued regularly, and this effort will continue until all eligible claims are processed.
Denials Processing
The IRS is addressing numerous ineligible claims. In response, the agency has intensified audits and is pursuing civil and criminal investigations to combat potential fraud and abuse. These efforts to combat fraud and abuse have further contributed to delays in processing valid claims.
Claim Withdrawal Program
For businesses with pending claims that remain unpaid, the claim withdrawal program remains an option. This initiative encourages businesses to remove ineligible claims from the system, helping the IRS focus on processing valid submissions.
Recapturing Interest on Erroneous Claims
New IRS regulations propose treating overpayments of ERTCs as underpayments of federal employment tax. This enables the IRS to assess these overpayments as business tax liabilities, including the authority to recover overpayment interest as tax underpayment.
What Caused the IRS Delays?
A few different factors are leading to the delayed processing of ERTC checks. These delays can be extremely challenging for businesses waiting for the credit to keep their business afloat. These are the key reasons for the delays:
- Influx of claims resulting from misinformation
- A large number of ineligible claims
- Issuing many denials of improper claims
- Increasing number of audits and civil and criminal investigations for fraud and abuse
As of September 2024, 460 criminal cases related to the ERTC were initiated and 28,000 disallowance letters were sent, preventing $5 billion in improper payments.
Because it’s time-consuming for the IRS to filter valid claims out of all the invalid claims, processing times remain delayed, and the system is still under pressure.
Managing Client Expectations
With the IRS accelerating its efforts, it’s important to manage your clients’ expectations effectively:
- Reassess Eligibility: Advise clients to withdraw their claim if they believe it is not valid.
- Anticipate Refunds: Let clients know they should expect refund checks within the coming weeks or months.
- Explore Alternatives: Help clients identify other financial relief options to maintain cash flow while waiting for ERTC checks.
- Educate Clients: Share updates on the latest IRS developments and explain the causes of current processing delays.
- Set Realistic Timelines: Provide clients with a clear and practical timeline to manage expectations about when funds may be received.
By partnering with PrestigePEO, your clients gain access to affordable, competitive employee benefits, including healthcare plans typically reserved for larger organizations. PrestigePEO also simplifies critical HR functions such as payroll, compliance management, and employee benefits administration, allowing your clients to focus on growing their business.
PrestigePEO not only helps your clients navigate financial delays but also positions you as a trusted advisor, delivering lasting, cost-saving solutions.
Navigating ERTC Updates with PrestigePEO
Partnering with PrestigePEO offers several advantages in the current landscape:
- Expert Guidance: PrestigePEO provides expertise in navigating the complexities of ERTC eligibility and compliance, helping businesses accurately assess their qualification for the credit.
- Efficient Claim Management: Leveraging the IRS’s consolidated claim process, PrestigePEO can effectively manage and correct ERTC claims on behalf of clients, ensuring adherence to the latest regulations.
- Advocacy and Communication: PrestigePEO maintains open lines of communication with the IRS and advocates for clients’ interests, striving to expedite the processing of legitimate claims and minimize disruptions.
Staying informed about the latest ERTC developments is essential for benefit brokers and their clients. PrestigePEO, you can help your clients navigate IRS delays, secure their financial relief, and access valuable HR support. With PrestigePEO’s expertise, you’ll provide the clarity and solutions your clients need in this complex environment.
Contact PrestigePEO to get started. Or, if you want to find out what makes PrestigePEO the broker’s PEO, visit this article.
