It was stated by the Feds that there is a $5000 employer tax credit. How do I apply this to my 941 tax deposit?

Good day, fmendez,

Our payroll team is already working on the implementing guidelines on how to apply the tax credit in QBO. 

In the meantime, you can create a holding or temporary bank account where you can post the credit. Then, use it as a payment method to record that your 941 taxes are already paid using the credit that you received.

Here's how:

1. Follow the steps in this article to set up a bank: Add an account to your chart of accounts in QuickBooks Online.
2. Once done, go back to the Payroll Tax Center and select the 941 tax, then click Record payment.
3. In the Approve Payment window, click the drop-down list for Bank Account.
4. Select the holding account that you created.
5. Click Record payment. 

We'll send updates from time to time via email notifications or pop-up messages within QBO as changes happen. You can also add a reply below if you need anything else. 

I have just two employees, out of 15, that are taking the FLMA leave and I can deduct their wages and, the employer's share of the Medicare taxes on those wages, from my 941 taxes.  The solution above won't work for  me, what would you recommend?

Thank you!

Hello, Natalietuman.

I know a way you might consider doing. You'll want to record it separately outside of QuickBooks to ensure this won't affect your taxes.

For more guidelines, you can check this out: Pay employees under the Family First Coronavirus Response Act

I have also added this link about tracking paid leave for your reference:

• What you need to know about the Families First Coronavirus Response Act.

If you have any other concerns, please let me know by adding a comment below. I'll be sure to help you out.

Greetings,

Just following up on the QBO procedure to properly document the tax credit on quickbooks. Please advise.

Thank you,

Felix 

Thank you for reaching back out to the Community, Fmendez. The procedure to properly document the tax credit in QuickBooks Online has been released. Depending on your payroll subscription, this article provides the steps on how to set up and track the credits.

If uncertain as to which Intuit payroll subscription you have, the links below used to access your payroll will show your payroll subscription type.

• Intuit Online Payroll Enhanced: https://iop.intuit.com/
• Intuit Online Payroll Full Service: https://fullservicepayroll.intuit.com
• QuickBooks Online Payroll: qbo.intuit.com

Click the Reply button if you have any other questions. I'm always here to help. Have a good day!

Thank you. I am now encoutering that quickbooks is allowing me to go past the $5,000 limit per employee. I thought QBO would cap the credit at $5k. Please advise.

Hello there, @ fmendez.

In the meantime, the option to set the limit per employee for the credit is unavailable. However, you can enter the credit amount on the paycheck when you run the payroll.

We’ll take note of this observation you have about setting up the tax credit amount for your employee. At the bottom part of this article, you can click on NO option for Was this helpful? to enter your feedback. So we’ll be aware and implement an update for further steps on how to apply for this credit.

Please check this article here for a reference: How to set up and track the Employee Retention Credit under the CARES Act.

I want to make sure everything is taken care of for you, so let me know if you have any other issues or concerns. I'm more than willing to assist.