Generate 941 Worksheet 2 (formerly Worksheet 1) 2Q 2021 for ERTC?

Hi there, ptheo1.

Welcome back to the QuickBooks Community. I appreciate you for performing troubleshooting steps to fix the issue about generating worksheet 2. With this, I'll ensure to share details about 941 Worksheet 2 and how it works.

If you have the FFCRA items calculate on the paychecks and you are referring to sick and family wages, worksheet 2 will not generate in the system once this wasn't included in setting up your payroll. That said, I suggest checking the guidelines for ERC or check with IRS on who's eligible for ERC. This is because when setting up the Employee Retention Credit in your payroll, you need to make sure you qualify for the credit. The size of your workforce, the structure of your business, and the reason why your business may or may not be closed all effect whether you can take this credit.

Once you've concluded you are eligible to accept the credit, you'll have to first set up your payroll to accept and track the credit. Since the Employee Retention Tax Credit covers regular time, overtime, and company contributions to health care, you’ll need to set each of these items in your payroll. You can click this article to see the additional details and how to perform the process. How to set up and track the Employee Retention Credit.

If everything is already set up and the issue persists, I suggest contacting our QuickBooks Support Team. They have the tools to pull your account and assist you in populating Worksheet 2 for the Employee Retention Credit (ERC). 

Please refer to this article to view various information on how QuickBooks populates each line and an equivalent report from your payroll software: How QuickBooks populates the 941.

Please know the Community has your back. If you have any clarifications or other concerns, click the Reply button and add a comment. I’ll jump right back in to assist further. Have a good one.

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We know the rules for the ERC and know our clients are eligible. That is not our issue, and as I mentioned, we did not use QB to track this because we did not like how QB went about it.

Just because we did our own calculations does not mean we should be penalized. Everything the IRS provides with the form should be available! Including all the worksheets.

I see the Worksheet 3 for the sick and family leave wages. But again that is not what I am talking about. We need Worksheet 2 to be generated so our ERTC calculations can flow to the 941.

Anyone have a workaround? That was how Q1 2021 was figured out. Some brilliant community member figured it out and shared. Unfortunately, QB was of no help.

Thank you for getting back to us and clarifying your concern, @ptheo1.

I want to make sure this concern is taken care of, and I'd like to redirect you to the best support group available to get this addressed right away.

Since you've already performed multiple updates and still can't generate the 941 Worksheet 2, I recommend contacting our QuickBooks Payroll Team. This way, they can further look into this matter and provide some workaround to generate worksheet 2. They can also create an investigation ticket if other users are experiencing the same. To reach them, please follow the steps below:

1. Go to the Help icon and select QuickBooks Desktop Help.
2. Click Contact Us.
3. Write your concerns in the description box, then select Continue.
4. Select which one of the support options you'd like to use.

You can also check out this article for another way of reaching out to our support team and its support hours: QuickBooks Desktop Support.

Please know that I'm just a reply away if you need any further assistance generating payroll forms in QuickBooks Desktop. 

I just spent over an hour on the phone with support. QB has no plans to fix this. If you are not tracking it the way they want it to be set up, you are out of luck. The only way to generate Worksheet 2, is to already have the payroll item tracking it from the beginning of the quarter. Even though if we had QB tracking it, we wouldn't need worksheet 2! Not to mention the way they proposed tracking it did not work at all. Hence us doing all of the ERTC calculations manually.

This is unacceptable. We are forced to do all of our client's 941s manually. Hours and hours of extra work. They won't even allow you to override sections in the 941. QB knows the issue and plainly refuses to fix it.

Our firm is having the same issue!  Completely unacceptable that they are not including Worksheet 2 so we can populate the ERC fields or even have an option to override directly on the form!  

We are having the same issue. Worksheet 2 needs to be available for those of us tracking independently. 

Thanks for joining the thread, @cpetrusiak.

At the moment, the option to generate Worksheet 2 based on your own calculations is unavailable in QuickBooks Desktop. As mentioned above, you have to set up a payroll item to track the Employee Retention Credit before you can generate it. Then, the program will calculate it for you based on the ERC guidelines.

I can see how this option would be helpful for you and your business. Therefore, let me take note of this as a suggestion to improve your QuickBooks experience. 

Additionally, you can send your own feedback to our product developers. This way, they can review your request and most likely include it in our future updates. 

Simply follow these steps:

1. Click the Help menu and select Send Feedback Online.
2. Choose Product Suggestion, then enter the details of your concern.
3. Select Send Feedback and click Close Window.

In case you need related resources while working with QuickBooks, please feel free to skim through the topics from our help articles.

Please let me know how else I can help you with QuickBooks. I've got your back and am always happy to help. Keep safe!

In major need of worksheet 2!  Don't know why this has to be so difficult for Quickbooks. The 941 form is overwhelming as it is. It would be different if we could manually override, but QB will not let us do this. Need fixed as soon as possible.  

I don't see a need to set up all of the payroll items/expenses in QB. That would require alot of work on each client due to having to go back in the payroll. 

Please help!

The only way I got Worksheet 2 to come up was to generate a check to a random employee for one cent.  Delete all the payroll items at the top and on the right under Other Payroll Items click on CARES ERC and input the one cent.  When you do the 941 Worksheet 2 will come up at the end. You will also have to go back and override the Payroll for ERC box which will show the .01.  It does the total calculation correctly but it does NOT do the split between Non-Refundable and Refundable Credits.  Haven't filed yet for that reason.  Suppose to be working on that............hope springs eternal

For some reason I couldn't get this to work for me. QB wouldn't allow me to add the CARES ERC to the Other Payroll items despite me adding it to the employee's profile. But thank you for posting!

If you fill our line 2e of the Worksheet 2 it will carry it over to the 941. That is the only way I could force it to populate the proper lines.

We didn't use QB to track this either. But when it came time to file, I created the accounts and payroll items as described here: https://quickbooks.intuit.com/learn-support/en-us/pay-schedules/how-to-set-up-and-track-the-employee...

Then I created a paycheck for an employee dated in Q2. I removed all the usual payroll items, and added to the "Other Payroll Items" section the payroll item "CARES Retention Emp". I entered $1.00 for this item and saved the paycheck. Then when I went to create the 941 form, Worksheet 2 shows up and I am able to override (right-click and select "override") the $1.00 and put in the correct amount. After filing the 941, I'm going to delete the $1.00 check.

Thank you!!!! This was so very helpful!

You can always do it manually create the 941 & the 941X manually call show the work sheet (although it’s not required to submit the worksheet for ERTC. Especially if you have done it before and you know what you’re doing, 

You can manually do you are 941 and your 941X, you could complete the worksheet to item per IRS‘s direction. It is not required that you submit the work sheet with your 941X, best practices which suggest that you send me a copy of the amended 941 marked  (as Amended) Andy a copy of the work sheet also.

You could also use an ERTC calculator to better analyze your refunds

https://simplifyingcalculation.com/smallbusiness/employee-retention-tax-credit-calculator