How do I properly record the CEWS wage subsidy deposit in Quickbooks?

patmcintyre · ‎October 06, 2020

As mentioned below:

Hi All,

You should create a new account called "Other Income - Canadian Emergency Wage Subsidy" and post it there. You should also have an account called "Other Income - Temporary Wage Subsidy" for that subsidy, as they are different programs and should be recorded separately. Both subsidies are taxable income. Be careful with the Temporary Wage Subsidy amount as you need to be deducting that from your CRA Payroll Source Deductions payment. You'll need to record an adjusting journal entry to reduce the PD7A payment in your Payroll Taxes module as it won't match up with what comes out of your bank account. Then you can match the reduced Source Deductions payment to your Journal Entry. The CEWS amount is not a deduction of any kind, it's going to come into your bank and should be posted directly to other income.

This income is considered extraordinary income and is not included in the calculation when comparing revenue year-over-year, etc. when calculating your benefit %.

Pat

userlaura-lorca-d · ‎November 25, 2020

This mean that I will only have one journal like Debit: bank account. Credit: CEWS account?

Thank you

Tashl · ‎February 11, 2021

Hi,

Thank you. That is great info. One other question. I understand that the money received for each CEWS period needs to be accounted for at the period time not when it was received. What is the best way to do this in Quickbooks?

Thank you,

Natasha

cruisewithtony · ‎February 28, 2021

What date to use when you post a direct deposit from CEWS?

The date of the deposit?

The filing date?

Or the last day of the CEWS period to which it applies?

This will impact year end taxes...

Nololo · ‎April 18, 2021

I was wondering if you got clarity on this issue? I am having the same problem.

What date to use when you post a direct deposit from CEWS?

The date of the deposit?

The filing date?

Or the last day of the CEWS period to which it applies?

This will impact year end taxes...

KymBerly · ‎April 19, 2021

See answer from

The only difference for me is that I am recording it on the date it is deposited since I did not consistently apply for it in a timely manner. (As in, I would wait to see if I could get away with not applying and then if I still had not recovered financially, I applied.) From being audited in the past - pre covid - it did not seem to matter which method you used for your recording dates so long as you always used the same dates. I am not an accountant - this is only gleaned knowledge.

MurrayM · ‎May 30, 2021

Thanks for the useless answer. Read the question and answer it!

Stink Lines · ‎March 02, 2022

Report a wage subsidy on your tax return: COVID-19 wage and hiring support for businesses - Canada.c...

The wage subsidy is generally considered to have been received on the last day of the claim period it relates to.

For example, if you applied for and received a wage subsidy for claim period 23 (November 21 to December 18, 2021), we would consider you to have received the amount on December 18, 2021, even if you applied for period 23 in 2022 or received your subsidy amount for period 23 in 2022.

- https://www.canada.ca/en/revenue-agency/services/wage-rent-subsidies/covid-wage-hiring-support-busin...

Belen1962 · ‎April 01, 2022

Hi Alicia,

I was told from QuickBooks who teach the program that I am not suppose to use journal entries except adjusting journal Entry. I created Other Income - Canadian Temporary Wage subsidy just like my accountant says. My question is how to records CEWS wage subsidy without using Journal Entries.

Jen_D · ‎April 02, 2022

Thanks for joining this thread, @Belen1962.

Part of the process of recording Canada Emergency Wage Subsidy (CEWS) in QuickBooks Online is creating a journal entry. This is to reduce liabilities for the subsidy and post it to the income account. This is also discussed by Alicia in her answer, and you can find this step in our resource guide.

Check out this article for the complete steps and instructions ton how to handle CEWS in QBO: Temporary Wage Subsidy for Employers (10%).

Please post here anytime if you need further help or for updates with this topic. I'll be right here to help you out. All the best.

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