If your business filed a legitimate Employee Retention Credit claim and you're still waiting for your refund, 2025 brought significant changes that directly impact your timeline and options. The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced retroactive restrictions while the IRS continues processing an estimated 300,000 remaining claims as of fall 2025.
Here's what business owners with legitimate ERC claims need to know about current processing realities and why exploring alternative funding solutions has become more critical than ever.
The One Big Beautiful Bill Act's Retroactive Restrictions
The most significant provision in the OBBBA is Section 70605(d), which retroactively prevents the IRS from processing or paying any ERC claims for Q3 and Q4 2021 if they were filed after January 31, 2024 even if the claim is completely legitimate and meets all eligibility requirements.
For businesses with valid claims filed before this deadline, the challenge isn’t eligibility; it’s the excruciating wait while the IRS processes what remains of an unprecedented backlog.
December 2025: Where the Backlog Stands Now
According to the Penn Wharton Budget Model’s September 2025 analysis, the IRS has made substantial progress reducing the backlog:
- October 2024: 1.2 million claims pending
- April 2025: 597,000 claims remaining
- July 2025: Estimated 297,000 claims remaining
While the raw numbers have improved, processing times tell a different story. The average time to process an ERC claim has ballooned to 546 days in 2025 nearly six times longer than the 97 days average in 2023 before the moratorium.
Extended Audit Exposure: Six Years and Counting
Beyond processing delays, the OBBBA extends the IRS statute of limitations to six years for all ERC claims (up from five years). For Q3 and Q4 2021 claims specifically, the IRS now has until the later of April 25, 2028, or six years from the filing date to audit and potentially recapture funds.
This creates a challenging situation: businesses with legitimate claims face both extended processing delays and prolonged audit exposure even after receiving their refunds.
The Disallowance Letter Crisis
Adding to the uncertainty, the IRS has issued approximately 100,000 disallowance letters (Letters 105-C and 106-C) through 2025. National Taxpayer Advocate Erin Collins has repeatedly criticized these letters for lacking clear explanations, leaving businesses confused about why their valid claims were denied.
Even businesses with meticulously documented, completely legitimate claims face the risk of algorithmic denial requiring expensive appeals processes to receive funds they’re rightfully owed. The National Taxpayer Advocate reported that as of December 2025, nearly 11,000 cases submitted through the Taxpayer Advocate Service remain unresolved.
Why This Matters for Businesses With Valid Claims
The National Taxpayer Advocate identified ERC processing delays as the number one issue harming American businesses in her 2025 reports to Congress. For companies with legitimate claims struggling with payroll, operational expenses, or growth investments, these delays create unnecessary financial strain.
You’ve already done everything right:
- Met all eligibility requirements
- Filed before the January 31, 2024 deadline
- Properly documented your claim
- Consulted with qualified tax professionals
Yet you’re still stuck waiting, potentially until next year or beyond, with 546-day average processing times and no guaranteed timeline.
Taking Control With ERC Buyouts for Legitimate Claims
This is where ERC buyout solutions become particularly valuable but only for businesses with legitimate, well-documented claims. Companies like OBC Fund specialize in purchasing valid ERC receivables, providing immediate liquidity.
The IRS projects clearing the remaining backlog by fall 2025, but with 546-day average processing times, leadership transitions (former Commissioner Werfel resigned in January 2025), and 26% workforce reductions, uncertainty remains for businesses in the queue.
If you have a legitimate claim filed before January 31, 2024, and you’re tired of waiting in an indefinite backlog with no status tracking, an ERC buyout may be the strategic solution to access your capital now rather than gambling on processing timelines that could extend well into 2026.
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. OBC Fund only purchases legitimate, verified ERC receivables. ERC buyouts are receivable purchase agreements, not loans. Consult with a qualified tax professional regarding your specific situation and claim eligibility.