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ERTC Updates for ADP TotalSource® Clients

ADP is aware of the recent Internal Revenue Service (IRS) announcement issuing a moratorium on the processing of new Form 941-X amended returns that contain Employee Retention Tax Credit (ERTC) claims through December 31, 2023. The IRS has stated that they will continue to process claims filed prior to the moratorium, but at a slower rate as a result of more thorough compliance reviews. The IRS has also stated that “existing ERTC claims will go from a standard processing goal of 90 days to 180 days and much longer if the claim faces further review or an audit.”

We recognize the significant impact any slowdown in processing will have on our clients that are still waiting to receive their ERTC and understand how critical these funds are to your business. As such, ADP has taken multiple actions to actively advocate on behalf of our clients to help continue the processing of existing claims and expedite the processing of their outstanding ERTC refunds.

Important To Know:

  • ADP TotalSource does not provide an advance to clients on their tax credit funds. Any claims that ADP or similar providers are obligated to provide the ERTC funds to you prior to receipt of funding from the IRS are inaccurate.
  • ADP is not authorized to provide loans as we are not a licensed lending institution.
  • Once the IRS processes the ADP TotalSource Form 941-X that includes your ERTC refund claims, they will proceed with crediting the ADP TotalSource tax account for the refund amount payable for that tax quarter.
  • As soon as ADP TotalSource receives the ERTC refund corresponding to your company account, our service team will immediately contact you.

How We’re Supporting Our Clients:

We are actively in discussions with the IRS, including writing to the IRS Commissioner to further stress the importance of promptly resuming the processing of amended returns that include ERTC claims for ADP TotalSource clients. ADP TotalSource was one of the first PEO’s to obtain certification from the IRS in 2017, and must continue to meet rigorous background, financial, and IRS reporting requirements to remain a Certified Professional Employer Organization (CPEO)1. We believe that ADP’s long history of working with the IRS as a trusted partner and ADP TotalSource’s CPEO status clearly distinguishes us from aggressive ERC promoters and have requested that the IRS allow for the processing of the existing outstanding returns to resume and for future returns to be processed without delay.

We recently met with the National Taxpayer Advocate to request support in advocating within the IRS the importance of the IRS promptly resuming the processing of outstanding ERTC claims without further delay. We have also taken multiple actions alongside the National Association of Professional Employer Organization (NAPEO) – a national organization that supports the PEO industry. These include:

  • Actively partnering with and engaging in ongoing discussions with members of the IRS, members of Congress and congressional staff to encourage the IRS to promptly resume processing of ERTC claims, its impact and areas of potential resolution.
  • Working to ensure the ERTC backlog, and its impact on small businesses nationwide, is raised during key congressional hearings and other public policy meetings.
  • Supporting members of Congress who have sent numerous letters to the Treasury/IRS requesting immediate attention to reduce the backlog and supporting NAPEO with its submission of a series of letters to Treasury/IRS addressing the issue and proposing potential solutions, including a recent October 3, 2023 letter from the House Ways and Means Committee to IRS Commissioner Daniel Werfel requesting a plan from the IRS on what is being done to address the increasing backlog of ERTC claims following the September moratorium.

For more information about this matter please reach out to your ADP TotalSource representative.

FAQs

When can I expect to receive my ERTC refund?

Once the IRS finalizes its review of each Form 941-X that includes ERTC refund claims, they will proceed with crediting the ADP TotalSource tax account for the refund amount payable for that tax quarter.

What happens when ADP receives my ERTC refund?

Once ADP TotalSource receives the ERTC refund corresponding to your company account, your service team will immediately contact you. We will request copies of supporting documentation for the ERTC refund that ADP TotalSource can keep in its records in the event of a future IRS audit. Once the supporting documentation is received, the credit will be processed as follows:

  • Active ADP TotalSource clients will see the ERTC refund appear on the payroll invoice with the description of “CARES Wage Retention Credit.”
  • If you have terminated your relationship with ADP TotalSource, the ERTC refund will be processed as a check and sent via UPS.

However, if you have additional questions or need support before this occurs, please reach out to your TotalSource team and we’d be happy to help where we can.

Can ADP TotalSource provide a status update on my ERTC refund?

While we are not able to provide a specific timeline for the IRS' processing of the ERTC refunds, ADP continues to communicate with the IRS in an effort to get these returns processed as expeditiously as possible.

Can ADP TotalSource advance my ERTC monies ahead of receiving the funds from the IRS?

No, ADP is not authorized to provide loans as we are not a licensed lending institution.

 

1The IRS does not endorse any particular certified professional employer organization. For more information on certified professional employer organizations, go to www.irs.gov.