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How to Record Employee Retention Credit in QuickBooks

The Internal Revenue Service (IRS) describes the Employee Retention Credit (ERC) as a “refundable tax credit against certain employment taxes.” With a maximum of $26,000 per employee available across all six quarters, it is a potentially lucrative cash refund for businesses and organizations. Virtually every company in the country can qualify for the ERC. 

Yet, many employers have still not applied. There is a lot of confusion about the ERC, including how to record the tax credit properly. Sunrise Business Solutions | ERC Guaranteed is committed to helping our clients get the maximum ERC—guaranteed. In this blog post, our ERC specialists provide a brief guide to recording the Employee Retention Credit in QuickBooks. 

Three Steps for Recording the ERC in QuickBooks

QuickBooks is one of the most popular accounting software packages for businesses and organizations in the United States. According to data from the International Center for Settlement of Investment Disputes (ICSID), an estimated 29 million small businesses nationwide use QuickBooks as their primary accounting system. Most of these businesses can qualify for the ERC. It is not difficult to add the ERC to Quickbooks. Here are three steps to record the ERC in QuickBooks: 

  1. Set Up Employees With Payroll Types: Using the “Payroll” menu and the “employee” option, you can set up each employee with different payroll types. 
  2. Create and Use the CARES Act: Within employee payroll types, you can create and use a section for the “CARES Act” to record employee information about the ERC. 
  3. Enter Pay for Corresponding Fields: You can enter employee pay for corresponding fields, including the Employee Retention Credit (ERC). 

When done correctly, this will effectively enter “negative” payroll information for an employee so that the ERC tax refund you receive can connect with a specific employee. Calculating the ERC is notoriously complex. The team at Sunrise Business Solutions | ERC Guaranteed can take care of it for you so that you can get the maximum ERC benefit. 

Do Not Assume it is Too Late to File for the Employee Retention Credit.

The ERC is available for six quarters in total: The final three quarters of 2020 and the first three quarters of 2021. That being said, businesses and organizations should not worry if they have still not filed for the ERC. There is a federal law provision allowing employers to file an amended return for up to three years after a tax period. In other words, you can still file for the ERC for 2020 and 2021 in 2022. Even if you have already filed your returns and “finalized” that information in QuickBooks, you can still amend your return and file for the ERC. 

We Help Clients Get the Maximize ERC Tax Credit—Guaranteed

At Sunrise Business Solutions | ERC Guaranteed, we are Employee Retention Credit specialists. Our team of specialists goes above and beyond to help our clients get the maximum ERC benefit. You can still file for the ERC for 2020 or 2021 in 2022. Act now. Call us at 1-888-210-8870 or contact us online to arrange your free, no-risk ERC assessment. You can qualify in as little as 60 seconds.