Introduction About Employee Retention Credit
QuickBooks is a popular accounting software businesses of all sizes use to streamline their financial processes. If you’re eligible for the Employee Retention Credit (ERC) and want to set it up in QuickBooks, this step-by-step guide will walk you through the process. In Addition, by accurately configuring the ERC in QuickBooks, you can ensure proper tracking and reporting of this valuable credit.
Step 1 in Obtaining Employee Retention Credit
Ensure QuickBooks Compatibility: Before setting up the ERC in QuickBooks, confirm that you are using a QuickBooks version that supports payroll tax credit features. Subsequently, this guide assumes you are using QuickBooks Desktop or QuickBooks Online.
Step 2
Update QuickBooks: Ensure your QuickBooks software is updated with the latest version. Updates often include bug fixes, new features, and regulatory changes, which are crucial for accurate ERC setup and reporting.
Step 3
Understand ERC Requirements: Familiarize yourself with the eligibility criteria and requirements for ERC. Refer to IRS guidelines and consult a tax professional to ensure you meet all the qualifications.
Step 4
Set Up Payroll Items: Go to Lists > Payroll Item List in QuickBooks Desktop. Click on the “Payroll Item” drop-down menu and select “New.” Choose “EZ Setup” or “Custom Setup” based on your preferences. Follow the on-screen instructions to create payroll items for the Employee Retention Credit. Nonetheless, In QuickBooks Online, navigate to the Payroll Center. Click the “Taxes” tab, then select “Add Payment.” Choose “Other Tax” and click “Add New Tax.” Enter the necessary information to create the payroll item for the Employee Retention Credit.
Step 5
Configure Payroll Item Settings: Configure the settings to calculate the ERC for each payroll item created accurately. Furthermore, in Step 4 set the tax tracking type, tax agency, and liability account. Moreover, the tax rate or amount is based on your specific situation and the guidance provided by the IRS.
Step 6
Assign Payroll Items to Employees: Once your payroll items are set up and configured, you must assign them to eligible employees. In QuickBooks Desktop, go to Employees > Employee Center. Double-click on an employee’s name, navigate to the “Payroll Info” tab and select the appropriate payroll items for the ERC.
In QuickBooks Online, navigate to the Employees tab and click on an employee’s name. Under the “Pay” section, click “Edit.” Assign the payroll items created for the Employee Retention Credit to the employee.
Step 7
Track ERC on Payroll Reports: To monitor and report on the ERC in QuickBooks, generate payroll reports that include the ERC details. Go to Reports > Employees & Payroll > Payroll Summary in QuickBooks Desktop. Customize the report to fit the payroll items related to the ERC.
In QuickBooks Online, navigate to the Reports tab and search “Payroll Summary.” Customize the report to include the payroll items associated with the Employee Retention Credit.
Step 8
Regularly Review and Adjust: Ensure you review your payroll reports regularly to verify accurate calculation and tracking of the Employee Retention Credit. Consequently, adjust if changes to eligible wages, employment status, or other factors impact the credit amount.
Step 9
Consult with a Professional: If you have questions or concerns about setting up the ERC in QuickBooks, consult an ERC professional or an experienced QuickBooks advisor. In addition, they can guide your business and ensure compliance with IRS regulations.
Final Step in Getting Employee Retention Credit
If applying for and setting up the ERC in QuickBooks isn’t for you. Call our ERC Specialists, and we will do all the work for you.
Conclusion about Employee Retention Credit
Setting up the Employee Retention Credit in QuickBooks allows you to accurately track and report this valuable credit. Moreover, if it’s more work than you want to complete on your own, we highly suggest contacting one of our friendly and helpful ERC tax professionals. Call (877) 658-2472 or email erctaxcredit@teamais.net today and get the help you need.