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Level 2

Claiming ERC Tax Credit from 2020 - Do it in QBO or Fix the Forms Outside of QBO? Transfer to Quickbooks Desktop?

I really enjoyed the video and step-by-step instructions on completing the steps required for the ERC tax credits for Quickbooks Desktop. The instructions for the ERC tax credits for Quickbooks Online seem simple enough, but the business owner and the accountant do NOT have access to change past paychecks. This is further challenged when we switched from Desktop to Online after the 1st Quarter of 2020 (you know, when we all quarantined). The checks that came from Quickbooks Desktop apparently did not process correctly. That being said, the reports I was instructed to pull at the time showed they were 100% Correct, though a NEW report shows numbers that are COMPLETELY different. 

This NEW report is how the Back end team with Quickbooks Online Payroll is 'correcting' the files for the ERC. When on the phone with them, they were completely unable to tell me how they would be changing any of the checks for the 1st through 3rd quarter. They ASSURED me that they knew what they were doing because they were processing hundreds of these.  Then I receive an email that the project is completed and if I pull 3 reports, then I can see that the changes for the 1st Quarter were made in the 4th Quarter of 2020. I was shocked and horrified that the changes were made in a quarter that I cannot file any correction in. AND their corrections actually changed the AMOUNT the employees were paid and instructed me to redo everyone's W2s. 

Needless to say almost a week later and my books are messed up. They only seem to respond to me AFTER my day ends (6 pm EST) and I can therefore not get back to them until the next business day. 
I am at a loss as to how to handle this. Does anyone have any advice?  The business I am helping can only claim the ERC in the first 3 Quarters of 2020. I am coming up blind for solutions.


Ideally, I would like to transfer them BACK to Quickbooks Desktop and try to fix it there. Can anyone direct me to the con's of going from Quickbooks Online to QuickBooks Desktop? Will my client's files be transferred easily? Will I even be able to make the corrections needed by going from Quickbooks Online to Quickbooks Desktop?


Or - I can, hopefully, ask that Quickbooks Payroll UNDO the mistakes they made in my system and completely stop using them for payroll fixes, then create the new 941s outside of the QBO System. Can anyone advise me of any pitfalls in doing this? If I go this route - NONE of the ERC credits will be reported in QBO. I will be using excel and the PDF the IRS provides.


Or - any other ideas to help the books match what is ACTUALLY going on?


The community assistance is greatly appreciated. Speaking with the Quickbooks payroll team seems friendly enough, but they really have no idea how to assist with this.



1 Comment 1
QuickBooks Team

Claiming ERC Tax Credit from 2020 - Do it in QBO or Fix the Forms Outside of QBO? Transfer to Quickbooks Desktop?

I want to redeem your experience and give you a great one, @TheresaD0327.


In your case, this needs to be taken care of immediately. I want to pull up and check your QuickBooks account however, we're unable to do that here. We have our dedicated QuickBooks Payroll Support team that can undo any adjustments made with your payroll.


Fixing forms outside QBO may also need adjustments into the system that needs to be corrected with the Payroll Support team.


Though you've contacted them before, I'd still encourage you to reach them back through a phone call to help you fix or undo the payroll correction. They have the appropriate tools to resolve payroll corrections into the system in a private session. Here's the right link on how to talk to them through QuickBooks Online Payroll steps: Contact Payroll Support.


Also, the cons of having the client's file back to QuickBooks Desktop may prolong the payroll correction hurdle. I've added articles for you to review the process and to make sure you know more details about the conversion:



Please keep me posted if you have more questions about payroll correction. I'm dedicated to taking the time to answer them. Take care!

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