ERC Updates for ADP TotalSource® Clients

Pending Legislation Could Accelerate The Employee Retention Credits Filing Due Date

ADP TotalSource® has remained diligent in keeping you updated on information related to the Employee Retention Tax Credit (ERC) and we have important, new details to share.

On January 31, 2024, the House voted to approve The Tax Relief for American Families and Workers Act of 2024 (the Act), which, among other things, would significantly move forward the deadline for the Employee Retention Credit (ERC) claim submissions retroactively to January 31, 2024. If the Act or other legislation is passed that includes an ERC claim submissions deadline, it is unclear whether the deadline will be retroactive to January 31, 2024, or whether another deadline in 2024 will become applicable.

We will continue to monitor this situation closely and work directly with our clients to help them navigate this change.

ERC: Deadline for Submissions has Passed

ADP TotalSource is no longer accepting any new ERC claims. The final deadline for submission of 2020 claims was November 1, 2023, and for 2021 claims was November 1, 2024, in order to ensure  the claims are filed timely with the IRS by the statutory deadline.

Submitted ERC Claims:

We are in active communication with the IRS regarding the processing of our clients’ ERC returns. The IRS is working with our team of experts to continue the processing of existing claims and expedite the processing of clients’ outstanding ERC refunds.

Addressing the Moratorium:

  • In September 2023, the Internal Revenue Service (IRS) announced the issuance of a moratorium on the processing of new Form 941-X amended returns that contain Employee Retention Tax Credit (ERC).
  • On August 8, 2024, the IRS announced that they will “start judiciously processing claims filed between Sept. 14, 2023 and Jan. 31, 2024.”

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 ERC 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 ERC 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 determines that it has received the ERC refund corresponding to your claim, our service team will contact you.

How We’re Supporting Our Clients:
Addressing the Expedited Processing of Outstanding Refunds

Our continued efforts to advocate on behalf of our clients to ensure processing of existing claims and expedite the processing of clients’ outstanding ERC refunds have included:

  • Ongoing discussions with the IRS, including writing to the IRS Commissioner and ongoing direct communications with senior IRS officials to further stress the importance of promptly resuming the processing of amended returns that include ERC claims for ADP TotalSource clients.
    • ADP TotalSource was one of the first PEOs 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 have continued to take multiple actions alongside the National Association of Professional Employer Organizations (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 ERC claims, its impact and areas of potential resolution.
    • 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 the Treasury/IRS addressing the issue and proposing potential solutions.

For more information about this matter and how ADP is supporting its clients, please reach out to your ADP TotalSource representative.

 

FAQs

Has the deadline to submit Employee Retention Credit (ERC) claims changed?

On January 31, 2024, the House voted to approve The Tax Relief for American Families and Workers Act of 2024 (the Act), which, among other things, would significantly move forward the deadline for the Employee Retention Credit (ERC) claim submissions retroactively to January 31, 2024. If the Act, or other legislation, is passed which includes an ERC claim submissions deadline, it is unclear whether such deadline will be retroactive to January 31, 2024, or whether another deadline in 2024 will become applicable. We will continue to monitor this situation closely and work directly with our clients to help them navigate this change.

When can I expect to receive my ERC refund?

Once the IRS finalizes its review of each Form 941-X that includes ERC 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 ERC refund?

Once ADP TotalSource determines that it has received the ERC refund corresponding to your claim, your service team will contact you. Prior to ADP issuing your funds, you must submit supporting documentation corresponding to your ERC claim. To help us expedite the process of issuing your funds, please submit copies of all supporting documentation as soon as possible. ADP TotalSource will keep the supporting documentation in its records in the event of a future IRS audit.

You can find a list of the supporting documentation needed and how to submit it here. As soon as we validate that the required supporting documentation was received, the credit will be processed as follows:

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

If you have additional questions, please reach out to your ADP TotalSource service team at 844-448-0325 and we’d be happy to help.

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

While we are not able to provide a specific timeline for the IRS' processing of the ERC 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 ERC 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.