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americanaccounting
Level 2
March 16, 2021
Question

Employee Rentention Credit

  • March 16, 2021
  • 2 replies
  • 15 views

Is Employee Rentention Credit - taxable or non taxable income and where is it to be reported on Form 1120S? This is the credit given on Form 941 specifically for 2nd quarter of 2020.  Appreciate the help. 

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2 replies

J
Joseph1
Level 2
March 16, 2021

It should be reported as a deduction to payroll expenses. Say your payroll was 10,000, and you received a credit of 3000, you will report payroll expenses of just 7000

    A
    americanaccountingAuthor
    Level 2
    March 16, 2021

    Thank you Joseph1.  Employee Retention Credit is a combination of wages (in this case it will increase the profit of the company) and social security taxes.  How will those taxes be reported on the return?  Thank you.

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