Form 8994 Covid Credit

[gatekeeper651]

I did a return and now proseries has form 8994 for covid ffrca  I put the amount received on 8894 and put the amount in as other income to reduce wages.  But then it puts code P on the k1.  It also did the same thing for the employee retention credit   It then goes to personal and adds the credit on personal side on form 3800 - How is everyone doing this - I don't know what to do

[qbteachmt]

"It then goes to personal"

"It also did the same thing for the employee retention credit"

I think we covered this last year, let me dig around.

"The credit is allowed against the taxes imposed on employers"

https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-paid-leave-provided-by-small-and-midsi...

https://www.irs.gov/newsroom/covid-19-related-tax-credits-basic-faqs#what-employers-may-claim-tax-cr...

That should be helpful 🙂

The ERC is not a passed-through credit. It is part of the Business return. There's a good discussion from last year:

https://proconnect.intuit.com/community/lacerte-tax-discussions/discussion/2020-employee-retention-c...

The confusion is: trying to treat them as business Credits when they are Payroll Tax Credits. That means before reporting, affecting the 1120, 1120S, 1065, Schedule C. Not passed through.

https://www.irs.gov/newsroom/special-issues-for-employers-taxation-and-deductibility-of-tax-credits

I don't know your entity, of course. Try some articles:

https://www.paychex.com/articles/compliance/employee-retention-credit

https://www.bdo.com/insights/tax/business-incentives-tax-credits/irs-issues-additional-guidance-on-t...

https://proconnect.intuit.com/community/lacerte-tax-discussions/discussion/lacerte-tax/00/121738

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/employee-retention-cred...

https://www.irs.gov/newsroom/treasury-irs-provide-additional-guidance-to-employers-claiming-the-empl...