How can I take the Employee Retention Credit without it zeroing out the premium for Washington State Workers Compensation tax?

Hi there Sandy!

I want to ensure you'll get the correct calculations of your Employer Retention Credit (ERC) and Washington State Workers Compensation tax.

As an initial step, I recommend reviewing your item/s and identify how it impacts your taxes and forms. 

1. Open your QuickBooks Online account.
2. Click on Payroll at the left pane, then select Employees.
3. Tap on the employee's name, then click on the edit icon beside Pay.
4. Double-check the employee's pay and deductions from the number 3 and number 4 section.
5. If necessary, modify the items or pay types from there.

Here's an article you can open to know more about the supported pay types and deductions in QuickBooks Online Payroll.

I'm also adding these articles to learn more about how ERC is calculated:

• How to calculate the Employee Retention Credit
• How to set up and track the Employee Retention Credit under the CARES Act

If you have any other questions about the employer retention credit, please let me know by adding a comment below. I'm always here to help. Have a good one!

I have confirmed the pay types for my employees. They are correct.  Washington state has an unusual system for Workers Compensation that is exclusively run by the state.  When the hours used for the ERC are input into the ERC regular and overtime hours slots, the payroll system will not calculate the workers compensation based on hours worked. I have called into support and have been told me not to use the quickbooks ERC system in quickbooks and manually do the calculations.  At quarter's end I will call in a payroll correction.  My post is really a warning to all Washington businesses who are also taking the ERC credit.   They need to understand that their Workers Compensation premiums are not being withheld from employee paychecks or accrued for the employer portion.  This may surprise many when Q1 is over in April 2021.