Employee Retention Tax Credit (ERTC) Service

When Paychex receives confirmation that the refund has been processed by the IRS, we initiate your refund. If you have received only a portion of your refund, the remainder is still being processed by the IRS. It is possible that your refund could take place across multiple quarters.

If you currently have an ERTC claim on file, extended wait times are expected. The IRS is continuing to process these claims at a greatly reduced speed due to the complex nature of these filings and the need to protect businesses from being improperly paid. Click here to learn more about IRS processing time.

To prepare for IRS questions regarding ERTC refunds on Forms 941-X and prevent additional delays, Paychex created a fillable, electronic ERTC questionnaire. If you haven’t already, please complete the questionnaire and send it to your Service Professional, along with the associated proof of eligibility, even if you’ve hired a third party to calculate your credits and determine your eligibility. Having this information readily available can help Paychex respond quickly to IRS questions regarding ERTC refunds.

Paychex is working closely with several industry groups, including the National Association of Professional Employer Organizations (NAPEO), advocating on behalf of our PEO clients for IRS progress on ERTC.

Options may be available for advance loans on your Employee Retention Tax Credit with discounted interest rates. Click here to learn more.

ERTC claims from Professional Employer Organizations (PEOs) are filed on an aggregate level. That means your claim was filed under Paychex’s FEIN, rather than under your individual business FEIN. You should not contact the IRS, since only authorized Paychex representatives can discuss the status of our PEO accounts with the IRS. We continue to communicate regularly with our IRS contacts on the status of amended returns. At this time, the IRS cannot confirm the specific date each return will be processed.

Following are the main reasons for the delay in processing:

• Since the processing moratorium in September 2023, the IRS has conducted an in-depth review of claims submitted, separating them into three categories based on risk of erroneous information or ineligibility.
• All claims are now being reviewed closely by a specialized group of IRS examiners. Due to the increased level of scrutiny and the volume of claims submitted, the IRS has dramatically scaled back its processing pace.
• Paper Forms 941-X must be processed manually by the IRS, which contributed to a large backlog.
• Returns may not be processed in the order in which they were received.
• Large ERTC credit claims are being reviewed twice by the IRS before being issued.
• The IRS has established an audit process and currently has audits underway for a number of ERTC claims.

Yes, we have received refunds for some amended returns. We have filed multiple amended returns for each of the ERTC quarters and are waiting for the IRS to process most of them. We know that the IRS is working through their backlog of 941-X forms.

Some returns will be flagged for additional review by the IRS, which may result in later returns being processed first.

We are unable to provide an approximate date by which you’ll receive your refund. For current clients, payment is generated immediately upon Paychex’s receipt of funds and verification we have received proof of your claim eligibility. Former clients will be contacted for banking verification prior to disbursing funds.

The Taxpayer Advocate Service is an independent organization within the IRS that helps individual employers resolve issues with the IRS. They can only assist with individual employer returns. As a client of our PEO, wages for your company are included in the aggregate 941s filed under our PEO FEIN. The Form 911 will assign someone from the Taxpayer Advocate Service to your business, but once the advocate learns that you are seeking follow-up on a PEO aggregate return, they will not be able to assist.

Please contact your Paychex Service Professional with any questions.