Learn how to pay your employees when your business is closed due to COVID-19.
With QuickBooks and Intuit Online Payroll, you can ensure your employees get paid if you have to close and if you are eligible for the provisions found under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Consolidated Appropriations Act, and the American Rescue Plan Act of 2021.
|Update: With the passage of the Consolidated Appropriations Act and American Rescue Plan Act of 2021, the Employee Retention Credit has been extended to December 31, 2021. The Qualified Wages for the credit was changed to 70% of up to $10,000 per quarter through December 31, 2021.|
The definition of a large employer also was updated to employers that had more than 500 employees on average in 2019 (it was originally more than 100 employees on average in 2019).Additionally, beginning June 30, 2021 a feature was added for new businesses that have been operating after February 15, 2020.
941 Filing: We're waiting for more info from the IRS, so check back here soon to learn how the 941 is affected by the updated Employee Retention Credit.
What's the Employee Retention Credit?An eligible employer may be able to offset the impact of COVID-19 with an Employee Retention Credit. Generally, this allows an employer to get a refundable tax credit for up to 70% of the qualified wages paid to employees during the closure up to a maximum of $10,000 wages per employee, which amounts to $7,000 in credits, per employee.
Before you can take an employee retention credit, you need to do a few things. Here's what to do:
Make sure you qualify for the credit
Before you can set 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 affect whether you can take this credit.
|Note: If you have any questions about the CARES Act, the Consolidated Appropriations Act, the American Rescue Plan Act of 2021, or deferring the employer portion of social security, please talk with your accountant or accounting professional.|
Set up your payroll to accept and track the credit
Once you've determined you are eligible to accept the credit, you need 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, and then run payroll.
If you need to add the Employee Retention Tax Credit to prior paychecks or correct prior tax filings:
- QuickBooks Desktop Payroll Basic or Enhanced: you can make the corrections yourself in your QuickBooks Desktop file.
- All other products contact us to make the corrections.
Select your payroll service to get started:
|Note: Not sure which payroll service you have? Here's how to find which payroll service you have.|