Still Waiting on Your ERC Refund in 2026? What Employers Should Review

What Do Pending ERC Claims 2026 Mean for Employers?

The IRS is still working through ERC claims in 2026.

As of the week ending August 1, 2026, the IRS reported about 17,300 claims remaining in different stages. Some were under review. Others were pending payment or disallowance, under audit, waiting on review of a response, or already in Appeals.

The Taxpayer Advocate Service has also said the IRS expects to complete the initial review of substantially all remaining ERC claims by December 31, 2026.

That does not mean every claim will be paid by then. It is an initial-review target, not a guaranteed resolution date.

You can review current information from the IRS on its Employee Retention Credit page.

First, figure out what stage your claim is in

"Pending" can mean different things.

One business may be waiting for initial review. Another may be under examination. Another may already have a partial or full disallowance.

Before deciding what to do next, find out where your claim actually stands.

1. Go Back to the Original ERC Eligibility Decision

Start with a basic question:

Why did the business qualify?

For most employers, ERC eligibility came down to a qualifying government-order suspension or the required decline in gross receipts. Recovery startup business rules applied in certain 2021 quarters.

A general answer like "COVID hurt our business" is not enough. The IRS rules were more specific.

The IRS provides an ERC eligibility checklist employers can review.

Was the claim based on a government order?

If the claim relied on a full or partial suspension, find the actual government order and the analysis showing how it affected the business.

You should be able to connect the order to what changed in the business and when. A general supply chain problem, by itself, was not enough.

Was the claim based on gross receipts?

If the claim relied on the gross-receipts test, pull the numbers again.

Make sure the figures tie back to the business records and the correct comparison periods were used.

If the business was part of a commonly controlled or aggregated group, confirm that the applicable aggregation rules were considered. Those rules can affect gross receipts and other ERC calculations.

If you cannot recreate the eligibility calculation today, that is worth fixing now.

2. Review the ERC Wage Calculation Again

Once the eligibility story makes sense, look at the amount claimed.

Review the quarters, employees, wages, and any qualified health-plan expenses included in the calculation.

Also check whether related-individual wages were included and whether large-employer rules changed which wages could qualify.

Recheck PPP wage overlap

Employers generally cannot use the same wages both to support PPP loan forgiveness and to claim the ERC.

The allocation can depend on what was reported on the PPP forgiveness application and what was needed to obtain forgiveness.

That does not mean a business that received PPP automatically has an ERC problem. It means the wage allocation needs to make sense.

A useful review is whether the ERC amount can be reconciled to payroll records and the underlying eligibility and wage calculations.

3. Look Closely at Who Prepared the ERC Claim

A lot of employers used outside companies to prepare ERC claims.

That does not automatically mean the claim is wrong, but the business owner should still understand what was filed.

Ask for the eligibility analysis, government orders, gross-receipts calculations, wage calculations, PPP allocation workpapers, copies of Forms 941-X, and preparer communications.

If the explanation was something broad like "every business affected by COVID qualifies" or "supply chain problems automatically count," take another look.

Someone else may have prepared the claim, but the business still needs to know what the claim is based on.

For more context, IRSProb has information about ERC scams and questionable ERC promotions.

4. Organize Your ERC Records Before the IRS Asks

Put the file together now.

Depending on the claim, that may include:

• Forms 941 and 941-X
• Payroll registers
• ERC calculation worksheets
• Gross-receipts records
• Government orders
• PPP forgiveness records
• Health-plan expense records
• Ownership or aggregation information
• Preparer communications
• IRS notices and prior responses

The records should support both the eligibility position and the amount claimed.

The IRS currently says records related to ERC qualified wages paid after June 30, 2021 should be kept for at least six years.

5. What If You Review the ERC Claim and Think It Is Wrong?

First, figure out what is wrong and which tax period is affected.

The IRS still has an ERC withdrawal process for certain qualifying claims.

In general, the adjusted employment tax return must have been filed only to claim the ERC and cannot contain other adjustments. The employer must also want to withdraw the entire ERC claim for that tax period.

The claim generally must not have been paid, although the process may also apply when a refund check was received but has not been cashed or deposited.

If the IRS has already issued Letter 105-C disallowing the claim for that period, the withdrawal program is not available for that period.

If only part of the claim looks wrong, or the withdrawal process does not fit your situation, get advice before making the next move.

6. Some Late Q3 and Q4 2021 ERC Claims Face a Separate Rule

Current law prevents the IRS from allowing or refunding certain Q3 and Q4 2021 ERC claims filed after January 31, 2024.

That can apply even if the employer otherwise met the ERC eligibility rules. It does not affect every pending 2021 claim.

A Q3 or Q4 2021 claim filed after January 31, 2024 that was already refunded or credited before July 4, 2025 generally is not disallowed solely because of this filing-date restriction, although other compliance action may still be possible.

For a claim still pending in 2026, check two things: which quarter was claimed and when the adjusted return was filed.

You can review the IRS's ERC compliance FAQs addressing this filing restriction.

7. What Happens If the IRS Disallows Your ERC Claim?

The IRS may pay it, audit it, partially disallow it, or disallow it in full.

If you receive Letter 105-C, the IRS is generally telling you the claim has been disallowed.

Letter 106-C can involve a partial disallowance.

Do not treat either letter like routine IRS mail. Read the reason, check the tax period and amount, and pay close attention to the date.

If you disagree with the decision

Depending on the facts, you may be able to provide supporting information or ask for review through the IRS Independent Office of Appeals.

If the claim is under examination or you need help responding to an IRS review, you can also review IRSProb's IRS Audit Representation information.

8. Do Not Ignore the Two-Year Deadline After an ERC Disallowance

Generally, an employer has two years from the date of the claim-disallowance notice to resolve the claim administratively or file a refund suit in federal court.

An administrative appeal does not automatically stop that two-year clock.

Generally, once the two-year period expires without a timely refund suit or valid written extension, the IRS cannot issue the refund even if the claim is later resolved favorably.

When CP320B and Form 907 may matter

In 2026, the IRS introduced a process for certain ERC taxpayers getting close to the end of that two-year period.

Eligible taxpayers waiting for the IRS to consider their response to Letter 105-C or 106-C, with six months or less remaining, may be able to submit Form 907, Agreement to Extend the Time to Bring Suit.

But sending the form does not create the extension by itself. Both the taxpayer and the IRS must sign the agreement before the existing period expires.

If you already have a disallowance letter, put the date on your calendar. Do not assume an appeal protects the deadline.

You can review the IRS explanation of CP320B and Form 907.

9. What If Your ERC Refund Is Finally Paid?

If the refund arrives, compare it with what was claimed.

Confirm the quarter and amount, then keep the supporting file.

There may also be related income-tax work to review. An employer claiming the ERC generally must reduce its wage deduction by the amount of the credit for the same tax period.

If you are not sure that adjustment was handled, bring it up with your tax professional.

A Simple Pending ERC Claim Checklist

If your ERC refund is still unresolved, start here:

• Identify the current claim stage
• Confirm the quarters claimed
• Recheck the original eligibility basis
• Locate government-order documentation, if applicable
• Rebuild the gross-receipts test, if applicable
• Review aggregation or common-ownership rules
• Review the wage calculation
• Check related-individual and large-employer wage issues
• Check PPP wage overlap
• Locate Forms 941 and 941-X
• Gather payroll and supporting records
• Review what the ERC preparer provided
• Read every IRS notice already received
• Note any disallowance date and related deadline
• Review the facts before considering withdrawal
• Keep the file even if the refund is eventually paid

What Employers Should Do Next

If your ERC claim is still pending, you may not be able to make the IRS move faster.

Go back through the eligibility basis, wage calculation, and records behind it. If somebody else prepared the claim, get the workpapers and make sure the reasoning makes sense to you.

If the eligibility analysis and calculation appear well supported, organize the file and keep watching for IRS correspondence.

If something looks off, deal with it before making a rushed decision.

And if Letter 105-C or 106-C has already arrived, do not focus only on the appeal. Find the date on the notice and understand the two-year deadline that may already be running.

Use the time to know what was filed and be ready for what comes next.

For additional background, you can also review IRSProb's articles on ERC Claims in 2026 and Employee Retention Credit Pending in 2026.

Frequently Asked Questions About Pending ERC Claims in 2026

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