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KelleyC
Level 2

Employee Retention Credit

The max amount of the credit an employer will receiver per employee is $5,000, correct? Or is it just the crediting of the taxes on $10,000 per employee not to exceed $5,000?

We have 8 employees: $5,000 x 8 =$40,000 Is this the amount I should be telling my boss we are going to be able to put back in operations by paying our employees even though we are partially shut down?

OR

Is the credit amount just the tax calculated on up to $10,000 of wages per employee?

I know - I'm really confused...

10 Comments
Nick_M
QuickBooks Team

Employee Retention Credit

Hello, KelleyC. 

 

Let me elaborate on the ERC for you so it makes a little more sense. Under the CARES Act, an eligible employer may be able to offset the impact of COVID-19 with an Employee Retention Credit. Generally, this allows an employer to get a refundable tax credit for up to 50% of the qualified wages paid to employees during the closure up to a maximum of $10,000 wages per employee, which amounts to $5,000 in credits, per employee. 

 

This link will help you to figure out if your eligible and how to set up for the ERC.

 

- Set up and track the ERC under the CARES Act. 

 

If you have any other questions or concerns that you'd like to bring to our attention, please, post them down below. 

 

Thank you and have a nice evening. 

solarpowerearth947
Level 1

Employee Retention Credit

This link might help you out which i have mentioned below

Quickbook Redirect

Paradise Valley Produce
Level 1

Employee Retention Credit

Hi,

I am not sure if I am entering my employee hours correctly. For intuit online payroll when I enter my employees hours, do I enter all employee hours in the Employee Retention box and quickbooks takes 50% retention from those hours or do I only enter 50% of the eligible hours and the other 50% in regular hours? I talked with a rep and they said I was doing it correct by entering all hours but I am still unsure.

 

Also I now have a negative number for federal tax that I always apply to the following pay period. At what point and how do I get reimbursed for this amount?

 

Thank you

RR2448
Level 2

Employee Retention Credit

Is there a link available - How to set up , track to take this credit.

 


@KelleyC wrote:

The max amount of the credit an employer will receiver per employee is $5,000, correct? Or is it just the crediting of the taxes on $10,000 per employee not to exceed $5,000?

We have 8 employees: $5,000 x 8 =$40,000 Is this the amount I should be telling my boss we are going to be able to put back in operations by paying our employees even though we are partially shut down?

OR

Is the credit amount just the tax calculated on up to $10,000 of wages per employee?

I know - I'm really confused...


 

ReymondO
QuickBooks Team

Employee Retention Credit

Hi there, @RR2448.

 

Yes, the link on how to set up and track Employee Retention Credit is available in QuickBooks. 

 

This was actually shared by Nick_M in the first response. You can directly click this link to view its details: How to set up and track the Employee Retention Credit under the CARES Act.

 

You can also check this article to know more about the CARES Act and how it affects your payroll: How the Coronavirus Aid, Relief, and Economic Security Act affects your payroll.

 

In addition, you can run the Payroll Summary report to get a quick view of your payroll totals, including employee taxes and contributions in QuickBooks. 

 

I'm always here to help if you have any other concerns or questions. Just tag my name in the comment section and I'll get back to you as soon as I can.

MMI Financial
Level 1

Employee Retention Credit

The instructions under "How to set up and track the Employee Retention Credit..." under the subsection "QuickBooks Desktop Payroll" are WRONG.  First off, there is no "Step 3" in the instructions.  It jumps from "Step 2:  Set up the 3 payroll items" (with various subsections) to "Step 4:  Run a regular payroll".  Second, the account assignment instructions in step 6 under "CARES Retention Credit (Payroll Item) under "Step 2:  Set up the 3 payroll items" are WRONG.  Assigning the Liability account drop-down to "Payroll Liabilities" credits (increases) the "Payroll Liabilities" liability account and assigning the Expense account drop-down to "Payroll Expenses" does nothing (i.e., has no accounting effect) when liabilities are "paid" in accordance with "Step 5:  Pay liabilities".

 

What is the fix to this???

MMI Financial
Level 1

Employee Retention Credit

The instructions under "How to set up and track the Employee Retention Credit..." under the subsection "QuickBooks Desktop Payroll" are WRONG.  First off, there is no "Step 3" in the instructions.  It jumps from "Step 2:  Set up the 3 payroll items" (with various subsections) to "Step 4:  Run a regular payroll".  Second, the account assignment instructions in step 6 under "CARES Retention Credit (Payroll Item) under "Step 2:  Set up the 3 payroll items" are WRONG.  Assigning the Liability account drop-down to "Payroll Liabilities" credits (increases) the "Payroll Liabilities" liability account and assigning the Expense account drop-down to "Payroll Expenses" does nothing (i.e., has no accounting effect) when liabilities are "paid" in accordance with "Step 5:  Pay liabilities".

 

What is the fix to this???

MaryLandT
QuickBooks Team

Employee Retention Credit

I'm here to help ensure your employee retention credit items are set up correctly in QuickBooks Desktop, MMI Financial.

 

I've already consulted our content creator to update the steps in the said article. It will help prevent confusion while following the instruction.

 

After entering those items, you need to update the tax table. Payroll updates will get the most and accurate rates and calculations for supported states and federal taxes.

 

Here's how to download the latest tax table:

  1. Go to the Employees menu
  2. Choose Get Payroll Updates.
  3. Mark the Download Entire Update checkbox.
  4. Select Download Latest Update.
  5. A window appears when the download is complete.
  6. You can also check if you have the latest tax table.

After updating the tax table, I recommend chatting with our Payroll Team so they can check those items you've set up. They can do screen-sharing with you in a secure environment, And, verify why expense accounts for the retention credit are aren't hit after running payroll.

 

Let me know how the chat goes by commenting below. I'm always around whenever you have follow-up questions. Thank you and stay safe!

MMI Financial
Level 1

Employee Retention Credit

MaryLandT - your answer is incomplete, insufficient and, for what it was, incorrect.  Your suggestion of downloading the latest payroll updates was irrelevant to the problem.  I also followed your suggestion to chat with the Payroll Team.  While the representative appeared to understand the problem (I am not sure that he actually did), after 90 minutes of chatting back and forth and him consulting with whatever back-offices resources that he had, he never requested a screen-share so that I could show him the problem, and he ultimately offered me NO SOLUTION at all with an oblique "sorry I couldn't help" comment.  That effort was useless and a waste of almost two hours of my time.  I recorded a transcript of the chat session.

 

The bottom line is that the accounting results of the solution offered at this web site are WRONG!!

 

https://quickbooks.intuit.com/learn-support/en-us/pay-schedules/how-to-set-up-and-track-the-employee...

 

I am VERY DISSATISFIED (although not surprised) with the level of support (or lack thereof) that I have received from Intuit/QuickBooks.  I am a ProAdvisor.  It makes me wonder what the true value to me is (and the attendant expense) of my ProAdvisor subscription.

ironhorsestation
Level 1

Employee Retention Credit

I have spent the last hour trying to figure how in the heck I was supposed to set up our QuickBooks Desktop to track wages so that we can take the ERTC. There is nothing anywhere that makes any sense at all. I have been doing payroll for 30 years and using QuickBooks Payroll for the past 20. I can't change my COVID Compensation Pay Type, which is rediculous, to track this. So now I have to set up a completely new Payroll Item with NO comprehensible instructions!  Frustration is at an all time high.

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