SBA 7(a) Loans up to $500k Now Available

Business Insights

ERC Update: Essential details from the IRS – June 2024

The IRS released an update on the ERC program in June 2024. Here's what you need to know.

The IRS recently provided an Employee Retention Credit (ERC) update clarifying the status of outstanding claims, refund payment timing, and the processing moratorium. We’ve condensed the key details below.

What is the most recent status of ERC claims?

The IRS announced that they are resuming processing ERC claims filed prior to 9/15/23. To protect against issuance of improper payouts and ensure refund checks are issued to eligible entrepreneurs, the IRS will review each claim closely. This extends the time needed for processing. The IRS emphasized that businesses should not contact the IRS for updates on processing of ERC claims. Information is not available on specific claims as processing work continues.

When will the IRS make ERC claim payments?

Beginning with the oldest claims filed prior to the moratorium, the IRS anticipates releasing the first payments later this summer. With a new claims review process, the IRS reiterated that the pace of payments will be dramatically slower than previous periods.

Is the ERC processing moratorium still in effect?

Yes, the ERC processing moratorium is still in-effect. No claims filed with the IRS after September 14, 2023 are being processed. This means no claims filed after 9/14/23 will be reviewed nor considered for payment at this time.

Since the moratorium was enacted last year, the IRS processed 28,000 claims worth $2.2 billion and disallowed more than 14,000 claims worth $1 billion. During this time, the IRS continued to see ERC claim submissions at a rate of more than 17,000 per week. Currently, the IRS has 1.4 million ERC claims awaiting review.

Is there anything ERC filers need to do?

For businesses that filed legitimate claims:

Businesses that filed legitimate ERC claims do not need to take any action. Given the new review process and the ongoing processing moratorium, entrepreneurs awaiting ERC funding to grow their businesses will continue to wait.

For businesses who filed through promoters:

The IRS encourages businesses that filed through promoters who may not have properly determined eligibility and calculated the ERC credit amount to review the IRS’ withdrawal program or the IRS’ voluntary disclosure program.

For businesses who filed, but aren’t sure they qualify:

For businesses who are unclear on their eligibility, the IRS encourages individuals to review their ERC Eligibility Checklist. Additionally, review the Warning Signs for misleading Employee Retention Scams.

At NEWITY, we also created the following resources that may help business owners understand whether they qualified for the credit and/or used a reputable firm to help them file:


    1. Three Red Flags to Look Out for in ERC
    2. Not All ERC Processors are Created Equal
    3. Letter From Our CEOs 
 

For businesses who are awaiting ERC funds to grow their business:

For business owners who are eager to receive their ERC checks to fund new projects, it is likely wise to seek alternative capital options in the interim. At NEWITY, we provide access to SBA 7(a) loans up to $500,000; we would be happy to help you find affordable capital to grow your business.

To see if you’re eligible for an SBA loan, submit our brief application. It takes less than 10 minutes and does not impact your credit score.

Note: NEWITY no longer provides access to the ERC program. For businesses who filed for ERC through NEWITY and need support with their filing, please contact your NEWITY ERC representative or contact our member services team. We’re still here to help with your filing.

Read more Insights

To qualify for an SBA 7(a) small business loan, your business must be:

  1. U.S.-based and operated
  2. Owner supported / owner funded
  3. Eligible per the SBA’s requirements

Your loan amount will determined by the business’ average annual revenue, FICO score, and years in business