Employee Retention Credit questions

[Yrags]

Hi. I know there is a moratorium, but they will get to it when they get to it.

Client had PPP in 2020 and did not file for ERC (in 2020 you could not have both, but the rules changed retroactively). Now you can file for 2020 but cannot use the same payroll for both ERC and PPP.

Client cannot find paperwork to determine which and how much payroll was used for PPP; but rules state it must be at least 60% (in 2020). So for Qualified Wages in the worksheet, should I use 40% of the wages for the quarter (assuming no employee received more than $10,000 for the quarter)? This would be for Q3.

For Q4, rules state that maximum qualified wages are $10,000 per employee per year (in 2020). If an employee receives $7000 in one quarter but I utilize 40% ($2,800), and was paid another $7000 in the next quarter, my question is do you count the actual wages towards the $10,000 maximum (in other words can only use $3000 x 40% in Q4) or figure that the qualified amount ($7000 x 40% or another $2800) for a total qualified amount of $5600 for the year?

TIA. I know this is a pain in the neck. When client heard they would have to amend the 1065, all of the K1s, and all of the personal returns, they had second thoughts. Depends on the total amount of the credit for the year. The actual figures are higher.

[Medlin Software, Dennis]

I suspect no one here is going to offer advice.

These programs were in general news so much at the time, and were all over payroll and employer news, anyone who did not timely claim has issues to correct. If a corp, the person in charge shirked their duty to the corp (for instance), and should be held responsible for their error.

Bias. I was first involved with a corp very young so I actually learned about the fiduciary responsibility back then, and that lesson serves me well 40 years later. 

[JohnH]

I think this was your operative comment: —-> “client cannot find paperwork to determine which and how much payroll was used for PPP…<—

That’s my signal to hand everything back to the client and say “Let me know when you find it.  Otherwise I can’t help with this issue. “