Reporting ERC on Form 1120-S to reduce wages on lines 7 and 8 will flow to Schedule K-1 Line 13 using code P (Other Credits,) passing to Form 5884-A. When importing the information to Form 1040- Schedule K-1 (Line 13P), it resulted in a large refund. In addition, ProSeries doesn’t support E-file of form 3800.
Best Answer Click here
This discussion has been locked. No new contributions can be made. You may start a new discussion here
ERC does not become part of the 1040.
The employer is either supposed to report it on the 941, which allows them to hold back some of the funds they would have been depositing for Payroll taxes. Or, they file for the Payment when their own tax payment isn't enough to cover the amount they would be getting (credit vs advance). Or, now that it is over you file amended 941X to show they amount you are entitled to get refunded.
If you click the links I gave, you can read how to handle the offset of wages + employer tax used for the ERC and how to make the adjustment on the 1120S.
And you cannot use that same employee's wages for ERC and for WOC. That isn't allowed.
Did you click any of the links I gave, to read that reference materials? Here's another:
https://www.irs.gov/newsroom/employee-retention-credit-2020-vs-2021-comparison-chart
And:
https://wotc.com/erc-employee-retention-credit-cares-act/
"The CARES Act prohibits you from receiving the ERC for the SAME wages used for other credits:
Under the CAA, 2021, this prohibition is also extended to wages affected by certain other credits including: the Research Activities Credit, Indian Employment Credit, Credit for Employer Differential Wage, and Empowerment Zone Employment Credit."
No double-dipping.
It's not a General Business Credit. It's part of Payroll (941X) and then adjusts to wage expense for the 1120-S and is not passed through.
Very helpful, thanks so much! So do I just not check Line 13 with Code P of the 1040- Schedule K-1 input?
ERC does not become part of the 1040.
The employer is either supposed to report it on the 941, which allows them to hold back some of the funds they would have been depositing for Payroll taxes. Or, they file for the Payment when their own tax payment isn't enough to cover the amount they would be getting (credit vs advance). Or, now that it is over you file amended 941X to show they amount you are entitled to get refunded.
If you click the links I gave, you can read how to handle the offset of wages + employer tax used for the ERC and how to make the adjustment on the 1120S.
And you cannot use that same employee's wages for ERC and for WOC. That isn't allowed.
Did you click any of the links I gave, to read that reference materials? Here's another:
https://www.irs.gov/newsroom/employee-retention-credit-2020-vs-2021-comparison-chart
And:
https://wotc.com/erc-employee-retention-credit-cares-act/
"The CARES Act prohibits you from receiving the ERC for the SAME wages used for other credits:
Under the CAA, 2021, this prohibition is also extended to wages affected by certain other credits including: the Research Activities Credit, Indian Employment Credit, Credit for Employer Differential Wage, and Empowerment Zone Employment Credit."
No double-dipping.
Got it, thanks!
Well done, qbteachmt!
You have clicked a link to a site outside of the Intuit Accountants Community. By clicking "Continue", you will leave the community and be taken to that site instead.