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Level 3

Employee Retention Credit

1.  We qualify to get ERTC for our 2nd quarter wages

2.  We have already processed our payroll for all of 2nd quarter and the tax liabilities have been paid

3.  What do I need to do so that the 941 will correctly show that we are now owed money back due to ERTC

4.  I attempted to go to each paycheck and reclassify the wages; however, it then changes all the taxes and the net check changes so that won't work

5.  What specific steps do I need to take so that my 941 shows an amount to be refunded to me


6.  Should I file the 941 as if and then file an amended return? Is that easier?


Thank you

6 Comments 6
Level 3

Employee Retention Credit



I have figured out how to adjust the paycheck.


However, I do have an employee who has Parsonage and we DO take out FICA so that can be used toward ERTC.  However, if I change the Parsonage to the CARES Retention payroll item, then it will not show up as Parsonage on the W2. 


Any ideas?   


Do I change it for now and then change it back later?


Employee Retention Credit

Thanks for keeping us updated with the steps you've taken, pt0609.


Let's make sure that the payroll item for retention is properly set up. To help you review this, you can ask your accountant for help. 


In case you need a reference on how to set up Employee Retention Credit, just check out this article: How to set up and track the Employee Retention Credit


All  you need to know about how Employee Retention Credit works in QuickBooks can be found in the following articles:

If you need other helpful articles in the future, you can always visit our site: Help articles for QuickBooks Desktop.


Be sure to get back to me if you have other concerns. I'd be more than happy to assist you further. Wishing you and your business a continued success.


Level 3

Employee Retention Credit

thank you but you did not answer my question. 



Level 3

Employee Retention Credit

I see this post about setting up the Payroll Items and it makes me cringe.  That solution keeps getting posted and posted as an answer anytime anyone asks about Employee Retention Tax Credits, but I feel like they are not reading and understanding the questions. That is NOT a solution for everyone or every situation.  This is a good example of when you file the 941-X.   We are in a similar situation - we completed Q2 and realized our gross receipts were down enough that we qualify for the ERC. So I called Intuit and guess what they told me to do? St up the ERC items and then that they would need to go back and run corrections on all of our Q2 paychecks to move all wages to the new payroll items.  ARE YOU KIDDING ME? Setting up and using the ERC payroll items is completely incompatible with job costing for wages and Worker's Comp tracking. This is because using an Addition to pay the employee (in order to track the ERC) does not allow us to allocate employee hours/wages by job and by class, nor does it track Worker's Compensation (can't enter WC codes). So ALL of those key elements are obliterated for an entire quarter (or more if you are tracking over multiple quarters).  That is the most ridiculous thing I can imagine doing. 


My solution is NOT to use any of Intuit's "CARES/ERC" payroll items since I don't need to track any credit per se at this point (since I am looking back to prior quarter and won't be tracking and using credits as I go or in advance of verifying qualification).  I am planning to calculate the Q2 credits outside of Intuit and submit a form 941-X to file for the refundable portion of our ERC.  If anyone has any suggestions or thoughts on this, I would greatly appreciate them. Thx!

Level 2

Employee Retention Credit

I just spent two hours trying to find a way to produce a 941 with ERCs to no avail.  I have looked at every jury rigged suggestion and can't get them to work.  I am very concerned about the accuracy of the payroll and financial data as several have mentioned.  .We need the ability to override the fields on the 941.  For this quarter, I generated the preliminary 941 and used to make the changes.  It looks horrible, but the numbers are correct.  Sage form 941 works great!  The monthly deposit schedule has to be updated manually to agree with line 12.  I suspect that schedule B needs to be adjusted manually too.  I'm thinking the 941X may be the best way to go.  In the IRS Nationwide Forum, we were told that the IRS is processing amended 941s at a slow pace.

Level 1

Employee Retention Credit

I'm with you on this: they're proposing a terrible kludgy idea that just messes up all the data. Easier to download various forms and instructions from the IRS and work it by hand, and forget having Intuit involved. Folks should note that forms and instructions change year by year, so you have to go to the archived documents at to download form 941X and the instructions (two separate documents) which contain the crucial worksheet for calculating the credit. Get both the 2020 and 2021 sets of documents. Different years refer to different lines on your already filed 941 forms. I'm gearing up to do this for all seven quarters the program was offered, though I still want to do a little research as to what qualifies and what information does the IRS want. Coming up: phone call with the IRS business division. Whee!

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