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Level 1

Form 941 ARP - taking tax & wage credits retroactively

Trying to figure out how to take the tax and wage credits offered by the ARP retroactively. For example, we gave our employees paid time off for possible Covid exposures and getting the vaccine. At the time they were paid (all of this was in Q3 2021), I wasn't aware of the available wage and tax credits through the American Rescue Plan. So, I'm trying to figure out if I can manually enter these amounts into the Q3 Form 941 when I process it next month. Anyone else in the same position and if so, any guidance? Thanks.

3 Comments 3

Form 941 ARP - taking tax & wage credits retroactively

Yes, you can manually enter the transactions for the Q3 on the 941 forms, EdOr.


I've got some information on how to enter these items in QuickBooks Online.


 You can create liability checks for the third quarter and ensure to fill in the correct information however, we'll have to make sure that the Year-To-Date data are correct. That said, you can do a payroll liability adjustment. 


I'd also recommend reaching out to your accountant so you'll be guided in doing the adjustment. 


I've added this article as your guide about the adjustment process: Adjust payroll liabilities in QuickBooks Desktop.


Afterwards, you can run a payroll liability balance report to ensure that the data entered are correct.


Keep me posted if ever you need help in doing the adjustment. Have a good one!

Level 1

Form 941 ARP - taking tax & wage credits retroactively

Thanks Adrian, I should be able to figure out those adjustments and submit the Q3 941 with those credit amounts shown. Once I do that and have a credit balance with the IRS, do I just apply that amount to subsequent weekly 941 payments?  As an example, if I determine that we have $5,000.00 in payroll tax / wage credits per the ARP for 2021 Q3 and owe $6 000.00 on the first weekly 941 payment of Q4, I just apply that $5,000.00 to the $6,000.00 and pay the remaining $1,000.00? 

QuickBooks Team

Form 941 ARP - taking tax & wage credits retroactively

Hi there, EdOr.


I can direct you to our dedicated Paycheck Protection Program (PPP) support team who are specially trained in handling this kind of situation.


You can contact them by navigating the PPP Center inside your product and select Live Chat


Additionally, you can visit our Microsite for the latest news and information:


If you have any other questions, feel free to reach back out. I'll be right here to assist you. Have a nice day!

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