Are you a QuickBooks Online (QBO) payroll subscriber and wondering how to implement the employee retention credit (ERC) in your payroll software? Our accounting services team has prepared this guide to help you set up the ERC in your payroll system. Before you start, make sure you qualify for the credit. The ERC is a refundable payroll tax credit that offers financial aid to companies affected by the pandemic and encourages them to keep their employees on the payroll. To configure your payroll to accept and track the credit “in real time”, you must include overtime, regular time, and company contributions to health care in your payroll. Then, run QuickBooks Payroll.
To enter the ERC for regular hours, go to the Payroll menu and select Employee. For any overtime in the employee retention credit, if applicable, enter the employer's health insurance premium. The Employee Retention Credit (ERC) is a refundable tax credit under the CARES Act for eligible employers who have experienced a significant decrease in gross income or certain closures due to COVID-19.