Employee Retention Credit for 2021: What are the best practices for this? Specifically for entering it into QuickBooks software. Also, Q1 and past Q2 payroll credits?

Hello there, cousinssubs1.

I'll make sure to walk you through entering Employee Retention Credit in QickBooks Online.

To track the Employee Retention Credit for 2021, you'll need to set up your employees with the pay types in the program. To guide you further, follow the steps below:

1. Go to the Payroll menu.
2. Within the Employee tab,select the employee you’d like to add paid leave to.
3. In the How much do I pay an employee section, select the edit icon to add more pay types.
4. Under the CARES Act section, select the pay types that apply to you: CARES Act Regular and CARES Act Overtime.
5. If applicable, select and enter any Employer Paid Health Insurance Premium amount to be tracked on each check.
6. Select Done.

Once done, run your payroll using the pay types. These steps will guide you on how to do it:

1. Select Run Payroll from the Overview screen.
2. If you have multiple pay schedules select the schedule you are paying.
3. Enter hours in the corresponding fields:
   • For regular hours in the Employee Retention Credit Regular.
   • For any overtime hours in the Employee Retention Credit Overtime.
   • If applicable, enter in the Employer Health Insurance Premium.
   • If your employee is salaried, select the salary amount shown to reduce the hours by the number of hours you are paying your employee with the Employee Retention pay items.
   • If your employee is commission only, you will need to convert their pay to an hourly rate.
4. Enter any other items you need to include.
5. Select Preview Payroll.
6. Review the paychecks, and then select Submit Payroll.

For additional information, check out this article: Make sure you qualify for the credit.

Since you're recording Q1 and past Q2 payroll credits, we'll need to contact our payroll support team for payroll correction. They'll help you get your questions addressed in a secure environment. In QuickBooks Online, the best way to reach our support team is to sign in to your account, select the Help icon at the upper-right corner. Then, click Contact us and enter a brief description of your concern.

Lastly, you can check the additional details and tips when filing quarterly tax forms.
 

As always, you can go back here if you need help with your QuickBooks concerns. Take care!