How does the non-refundable portion of the ERTC work for processed 941-X claims?

The checks you'll be receiving should include both the refundable and non-refundable portions of your ERTC claim. Here's how it works: When you filed your 941-X forms, you were essentially telling the IRS that you overpaid your employment taxes during those quarters because you didn't initially claim the ERTC you were entitled to. The non-refundable portion of the ERTC first offsets the employer portion of Social Security tax you owed for those quarters. The refundable portion is what exceeds your tax liability. Since these quarters are from 2020-2021 and you've already paid all taxes due for those periods, the entire amount (both refundable and non-refundable portions) should be coming back to you as a refund. The terminology is confusing, but "non-refundable" really only matters during the original filing period - once you're amending past returns with 941-X forms, the distinction becomes less relevant because you're getting refunded for taxes you already paid.

I went through this exact same confusion last year with my construction business! I found https://taxr.ai incredibly helpful when I was trying to sort through all my ERTC documentation. I had filed 941-X forms for 6 quarters and was getting conflicting information from everyone. The taxr.ai system analyzed all my IRS letters and payroll documents, then clearly explained exactly what I should expect. It confirmed I'd be getting both portions back, and they were right - the checks included the full amount. Saved me so much stress because I was planning based on only getting part of the credit back. They also helped me understand the timeline better because those IRS letters can be confusing about when you'll actually see the money.

Just wanted to update that I tried https://taxr.ai for some confusing tax notices I mentioned earlier. I was skeptical but desperate since my CPA was taking forever to get back to me. The system actually explained everything way more clearly than my accountant ever did! It instantly told me that my S-corp notice was just informational and didn't require any action (my accountant later confirmed this but took 3 days to respond). I'm definitely using this for my ERTC questions now too. Seriously a game-changer for anyone dealing with IRS confusion - which is basically everyone who runs a business lol.

For anyone struggling to reach the IRS to ask questions about their ERTC status, I highly recommend https://claimyr.com - it literally saved me months of frustration. I had filed 941-X forms similar to the original poster but never got any processing letters, so I needed to speak with someone at the IRS. After trying for weeks to get through the regular IRS phone lines (always got the "call volume too high" message), I found Claimyr. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c - basically, they navigate the IRS phone system for you and call you back when they have an agent on the line. I was able to talk to someone at the IRS within 2 hours (after weeks of failed attempts), who confirmed my 941-X forms were in processing and gave me actual status updates. For my restaurant, this meant we could finally get clarity on our cash flow situation instead of being in ERTC limbo.

I have to eat crow on this one. After posting my skeptical comment, I was desperate enough to try Claimyr anyway. I honestly can't believe it actually worked! After trying for literally 3 months to reach someone at the IRS about my ERTC claim, I was connected to an agent within about 90 minutes of signing up. The IRS rep confirmed my 941-X forms were approved and explained that my checks were actually already issued but sent to an old address. They helped me update my info and are reissuing the payment. Worth every penny because I would NEVER have gotten this resolved otherwise. Now I know my business will be getting both the refundable AND non-refundable portions of the ERTC next week.

Has anyone had the IRS reduce their ERTC claim amount? We filed for 4 quarters and our letters said they "partially allowed" our claim. Trying to figure out if this means we'll get both portions (refundable and non-refundable) but just for a smaller total than we requested.

Just a heads-up to everyone waiting on ERTC checks - be prepared for potential delays beyond the 4-6 weeks mentioned in the letter. Our small business got our processing letters in January, but the actual checks didn't arrive until mid-March (about 9 weeks later). The IRS is still working through a huge backlog of these claims.

I can share some insight from our experience with ERTC refunds last year. We filed 941-X forms for 4 quarters and were in a similar situation wondering about the refundable vs non-refundable portions. The key thing to understand is that once you've already paid your employment taxes for those quarters (which you have since these are from 2020-2021), the IRS treats the entire ERTC amount as an overpayment refund. So yes, you should receive both the refundable and non-refundable portions in your checks. However, I'd echo what others have said about the timeline - don't count on exactly 4-6 weeks. Ours took about 8 weeks to arrive, and they came as separate checks for different quarters rather than one lump sum. Also make sure your mailing address is current with the IRS because these are paper checks, not direct deposits. One tip: when the checks do arrive, verify the amounts against what you claimed on your 941-X forms. We had one quarter where they made a calculation error that we had to call about (which was its own adventure trying to reach them). But overall, the process worked as expected once we understood that both portions would be refunded.