cancel
Showing results for 
Search instead for 
Did you mean: 
chanmock
Level 3

CCA: employee retention tax credits for 2020 now allowed with PPP

Hi all:

I just learned that because of the CAA we are eligible for the employee retention tax credits for 2020 even though we took a PPP. Of course we did not set this up in QuickBooks and this effects our second and third quarters of last year.  Does anyone have any idea how to set this up retroactively? And any guidance how to claim the credits? All our 941 forms for 2020 have already been submitted. Any help appreciated.

Thanks,

Chris

 

93 Comments 93
DivinaMercy_N
QuickBooks Team

CCA: employee retention tax credits for 2020 now allowed with PPP

Let me route you to the right support, @chanmock.

 

For any PPP questions, it would be best to reach out to our PPP support team for legal/liability reasons. To connect with them, just go to the PPP center of your product and select Live Chat. Then, to be updated for the latest information about PPP, please head to the Microsite at this link. 

 

For your reference, please open this article: Paycheck Protection Program.

 

Feel free to post here again if you have other QuickBooks related concerns. I'll be here to help you in any way I can. Have a good one. 

Hilary9
Level 3

CCA: employee retention tax credits for 2020 now allowed with PPP

I believe the question that was asked is not specifically related to the PPP, but to the Employee Retention Credit that was previously not allowed with a PPP Loan, and now it is. How do we claim the credit for 2020 retroactively? Do we have to amend the 941 for the specific qualifying quarter, or can we claim the credit on the 4th quarter 941 for a prior qualifying quarter in 2020?

RCV
QuickBooks Team
QuickBooks Team

CCA: employee retention tax credits for 2020 now allowed with PPP

Thanks for checking in with us, Hilary9.

 

To claim an Employee Retention Credit, eligible employers can receive a current cash benefit to fund qualified wages by reducing the employment tax deposits they are otherwise required to make. Another way is by filing a claim for an “advance refund” of the credit that is anticipated for a given quarter. Here’s how it works:

  • If you deposit federal employment taxes weekly or semi-weekly, you can reduce the tax deposits by the credit amount that applies to the qualified wages for that pay period.
  • If your credit amount is greater than your total employment tax deposits for the pay period or you didn’t reduce the tax deposits, you can get an advance refund of the credit using Form 7200. You can file this form multiple times throughout the quarter.
  • When you file Form 941 quarterly, you can check your credit amount against the tax deposits already made during the quarter. If there is still credit left, it will be refunded once you file this form.

We can file for this credit quarterly, so check back here to estimate your credit amount for the next calendar quarter. For more details about Employee Retention Credit, check out these articles:

If you have further questions about this one, please contact our Payroll Support Team. They'll pull up your account in a secure environment and help you with this one. To ensure we address your concern, our representatives are available from 6:00 AM to 6:00 PM on weekdays and 6:00 AM - 3:00 PM on Saturdays, PST. See our support hours and types for more details about this one. 

 

Feel free to visit our Tax forms page for more insight s about adding and managing your tax forms.

 

I'll be right here to continue helping if you have any other concerns or questions about QuickBooks. Assistance is just a post away. Have a great day ahead.  

Hilary9
Level 3

CCA: employee retention tax credits for 2020 now allowed with PPP

Thanks you for your reply, but you aren't answering my question. I know the ERC is available by reducing employment tax deposits, and I know an advance credit is available on form 7200. I also know how to set up and track the ERC in QuickBooks. I am trying to get information on RETROACTIVELY claiming the credit for 2020, based on the fact that the credit is now available to PPP Loan recipients. Before I file my 4th quarter 941, I want to know if I can claim the credit on 4th quarter, if the eligible period was for wages paid in 2nd or 3rd quarter, or do I need to amend the 941s for earlier quarters? I would appreciate NOT getting the stock answer. If anyone in the Community has any insight, I would appreciate your help.

Catherine_B
QuickBooks Team

CCA: employee retention tax credits for 2020 now allowed with PPP

I'd like to route you to the right support, Hilary9.

 

For the process of claiming your credit, I'd suggest reaching out to our PPP Support Team. Just click here and enter your product. Feel free to look into this page for more details: https://quickbooks.intuit.com/small-business/coronavirus/paycheck-protection-program/.

 

Always know the Community is here to help. Take care!

Hilary9
Level 3

CCA: employee retention tax credits for 2020 now allowed with PPP

Thank you, but AGAIN, you are not answering my question, or the question from the original post. Nowhere in either post are we asking about the PPP, we are asking about the ERTC. And please do not post the same response as an earlier employee about how to set up the ERTC. I know how to figure out if I qualify, and I know how to set it  up. I am asking about how to take the credit RETROACTIVELY for 2020. Please understand that we, as business owners, and accountants, are under a great deal of stress over how to claim the credit for 2020 BEFORE we process our 941s and W-2s, and close out the year. Getting answers that have nothing to do with the question are not helpful in any way.

chanmock
Level 3

CCA: employee retention tax credits for 2020 now allowed with PPP

Concur with what Hilary is asking. And for me I have already sent out 2020 W-2's and last quarter 2020 941 and have not set up the credit in QuickBooks so need to do everything retroactively. I figured out that we  qualify but need help setting it up in QuickBooks and doing the proper filing. Any help appreciated

Thanks

MaryLandT
Moderator

CCA: employee retention tax credits for 2020 now allowed with PPP

Let's route you to the right support team, chanmock.

 

Adding Employee Retention Credit (ERTC) for 2020 needs a special handling. I recommend contacting our QuickBooks Desktop Payroll Team so they correct your 2020 paychecks.

 

Just make sure to set up your payroll to accept and track the credit before getting in touch with them.

 

To contact our support:

 

  1. Open QuickBooks.
  2. Go to Help, then select QuickBooks Desktop Help.
  3. Select Contact Us.
  4. Enter your concern, then select Continue.
  5. Choose a way to connect with us:
    • Start messaging with a support expert.
    • Get a callback from an expert (availability may be limited).

You can also chat with them by selecting your product:

Let me know if you need anything else concerning QuickBooks Payroll. I'll be right here to help you.

elizabethn1
Level 1

CCA: employee retention tax credits for 2020 now allowed with PPP

I have the same question. With QBO payroll, I cannot adjust anything on my own. But with year-end, I don't have an entire day to sit on hold or chat with someone that can not help me.
If anyone figures out how to do this without printing out a paper 941 let me know.
Sometimes this is so frustrating.

taramarie976
Level 1

CCA: employee retention tax credits for 2020 now allowed with PPP

The sad truth is that quickbooks doesn't have a way to fix it retroactively.  You literally have to set up the payroll items for the credit and then redo all of the eligible payrolls as far as I can tell.  It's a PITA.  As for claiming all of the prior quarters on the 4th quarter return, I don't know if the IRS is going to update the 941 and QB subsequently also updating or if we just do it by hand or what.  No guidance and no info.  I'm waiting another week to see.

 

However, if you ALREADY filed quarter 4, as far as I know, it's too late to make the election.  At that point you just have to go back and amend each quarter.  But I could be wrong.  Won't know until forms/instructions are updated.  I think it might save time just to do the amendments at this point because I'm already tearing out my hair. 

OChar
Level 2

CCA: employee retention tax credits for 2020 now allowed with PPP

Oops posted 2x. See below...

 

 

OChar
Level 2

CCA: employee retention tax credits for 2020 now allowed with PPP

I used the process outlined here. I just faxed in form 7200 to the IRS. When I spoke to QB they said to call them back after a week to see if the IRS has processed the form so their systems can pull and update my 4th qtr 941. 

I read somewhere that the IRS is delayed in processing the forms, so I plan to manually update my 4th qtr 941 and mail it in. Then I'll call QB to try to have them match it or something.

highwater999
Level 2

CCA: employee retention tax credits for 2020 now allowed with PPP

Any update on this?  It's not been actually addressed in any of the support replies.

AlcaeusF
Moderator

CCA: employee retention tax credits for 2020 now allowed with PPP

Hello @highwater999,

 

Welcome to the Community. Let me provide some clarification about the tax credit concern.

 

For liability and legal reasons, the concern above requires users to contact the PPP team. They will be the ones to guide you with how to claim the credits.

 

We can't suggest how to do it here because we have a specific team and to ensure accuracy to the information. Here's how you can reach them:

 

  1. Open QuickBooks Desktop.
  2. At the top of the program window, click Learn more in the banner. LiveChatPPPDT.png
  3. Once in the PPP Center, select the green Live Chat button.

 

If you don't have access to the PPP Center, you can use this link: https://help.quickbooks.intuit.com/prechats/offerings/Paycheck-Protection-Program/23465/view.

 

For additional reference, I've attached a link you can use about the Employee Retention Credit: How to set up and track the Employee Retention Credit under the CARES Act.

 

Drop me a comment below if you have any other questions. I'll be happy to help you some more.

blueoaks
Level 2

CCA: employee retention tax credits for 2020 now allowed with PPP

My understanding (I'm not an expert, just a regular QB user like you) is that the new CAA legislation means that those of us who received a PPP loan can now take advantage of the ERC in 2020, but that does NOT mean that wages paid for/covered by our PPP loan can count toward 'qualified wages'. 

 

So, in other words, only wages not paid for with PPP dollars can be used in calc'ing your qualified wages for ERC. In my case this means there is no point in going back farther than Q4 of 2020.  I plan to file the 7200 for my Q4 qualified wages and amend my Q4 941, but that is all. 

chanmock
Level 3

CCA: employee retention tax credits for 2020 now allowed with PPP

Thanks blueoaks. That is my understanding as well. However, even excluding our payroll paid w PPP and FFCRA funds, we still have enough to qualify for the credit in the second and third quarters of 2020. I will engage the Quickbooks PPP team,  see what happens and report back.

chanmock
Level 3

CCA: employee retention tax credits for 2020 now allowed with PPP

 

should I be contacting the QuickBooks Desktop Payroll Team or the PPP team?  Different QuickBooks  Team members have pointed me to different help departments.  This issue is not really related to PPP but is definitely related to payroll. I need to go back and figure out the retention credit for the second and third quarters of 2020. Please advise.

Thanks

Chris

BettyJaneB
QuickBooks Team

CCA: employee retention tax credits for 2020 now allowed with PPP

Hi there, @chanmock.

 

When it comes to your retention credit concern for the second and third quarters of 2020, you'll need to reach out to our Payroll Team. They have the tools that can help check your setup and transactions.

 

Here's how you can reach them:

  1. Click on Help at the top menu bar.
  2. Press on QuickBooks Desktop Help
  3. Tick on QuickBooks support
  4. Choose your preferred way to speak with our representatives.

To add up, you can always utilize this link attached to give you more insights regarding setting up and tracking the Employee Retention Credit under the CARES Act: Learn how to pay your employees when your business is closed due to COVID-19.

 

Keep me posted on how things turn out. I'll be right here to assist you if you need more help. Take care!

SJohnsonDAS
Level 2

CCA: employee retention tax credits for 2020 now allowed with PPP

I was on a chat yesterday for almost 2 hours with a "Payroll Specialist" and got absolutely nowhere.  They really don't seem to understand the issue we are contacting them about.  Were you ever able to get any help with retroactively claiming the ERTC for form 941?

Rea_M
QuickBooks Team

CCA: employee retention tax credits for 2020 now allowed with PPP

Hello there, @SJohnsonDAS.

 

You're able to claim the ERTC for form 941 by tracking and setting it up under the CARES Act in QuickBooks Desktop (QBDT). Let me provide further details about this.

 

Once you're eligible to accept the credit, you need to first set up your payroll to accept and track the said credit. Since the CARES Act's ERTC covers regular time, overtime, and company contributions to health care, you’ll need to set each of these items, and then run payroll.

 

You can set up and track ERTC by performing the following steps:

  1. Set up your expense accounts for the retention credit.
  2. Set up the three (3) payroll items (CARES Retention Credit - Employee Addition, Health (Company Contribution), Payroll Item).
  3. Run a regular payroll.
  4. Pay liabilities.

 

For the step-by-step guide, I'd recommend checking out this article's QuickBooks Desktop Payroll section: How to set up and track the Employee Retention Credit under the CARES Act.

 

Once done, generate your 941 forms. You can refer to this article for the detailed steps: Create federal Form 941.

 

To learn more about Employee Retention Credit, you can refer to this article: COVID-19-Related Employee Retention Credits. It answers the most frequently asked questions about the said topic.

 

Let me know how it goes in the comments below. If you have other ERTC and Form 941 concerns, I'm just around to help. Take care always.

SJohnsonDAS
Level 2

CCA: employee retention tax credits for 2020 now allowed with PPP

Again, you fail to address the RETROACTIVE part of the equation.  Since this was just made available last month to those who had taken PPP, but is retroactive to March 2020, how do we now back track since the payrolls have already been run?

blueoaks
Level 2

CCA: employee retention tax credits for 2020 now allowed with PPP

I tried setting up QB Desktop this way. Does this solution work with employee time off accrual? No.  Does it work with employee and employer 401k/403b contributions and matching? No.  

So instead my plan (at present) is to simply not use QB to track the wages or utilize the credits mid-Quarter and simply file a 7200 for the entire quarter, and (somehow?) get cash back for the un-used credits, which will be 100%. 

chanmock
Level 3

CCA: employee retention tax credits for 2020 now allowed with PPP

Hi blueoaks and S Johnson DAS

 

I have not tried to contact Quickbooks to help me get this done.  Looks like others have not had much success.  I  think I may take blueoaks tack.  Because this year has been so crazy  I have been tracking payroll separately in  excel spreadsheets and may just use that to figure out the credit due for each quarter.   Then I'll just have to figure out how to amend the two 941's.  At this point I may just have the IRS sent me a check rather that trying to figure out the offset/credit.  Thoughts?

number_6
Level 1

CCA: employee retention tax credits for 2020 now allowed with PPP


Holy crap, I've read through this thread because I have the same issue as the rest of you. It doesn't sound like support is going to be of any help, seeing as they keep treating this as a PPP issue when it clearly isn't one. Hopefully someone knowledgeable will chime in eventually.

 

I'm a single-employee S-corp using QB Desktop and my 2020 Q4 941 has been filed. We got a PPP in 2020 and I am not using any numbers from the "covered period" of the PPP in my calculations for the ERC. I've done all of the calculations manually so that I can file a paper 941-X and get the ERC retroactively for 2020. I'm somewhat confident that I can handle that part of the equation.


My question is how do I square this retroactive credit in QuickBooks? Presumably the company is going to get a $5000 refund from the IRS at some point, and I assume this will impact the books in some way. We haven't done our 1120S yet, and I don't want to have to amend that, too. What is the correct way to handle this retroactive refund? Do I handle this now, or after we get the return? Really struggling to figure all of this out, and there is really no good guide for those of us that don't have money to hire an accountant.


Thanks in advance for any help.

Sign in for the best experience
Ask questions, get answers, and join our large community of QuickBooks users.
Sign In / Sign Up

Need to get in touch?

Contact us