The pandemic was a tough time for business owners in the United States. As most states took precautionary measures to fight against COVID-19, a lot of businesses were impacted during that period.
As an incentive to retain employees and curb unemployment, the government announced a tax credit for businesses that kept their workers onboard. With the deadline to claim the Employee Retention Tax credit fast approaching, you'll need to work fast to claim yours.
In this article, we're going to look at how you can report ERC claims on Form 1120-S. If you would like to speak to a live agent now about your ERTC needs, call 909.466.7876 for a free consultation!
Also, read the short article: ERTC Funds for Medical and Dental Practices and see how TPG can help all types of businesses.
Before we dive deeper into how you can report your ERC on Form 1120-S, here's what the form is used for. S-corporations use the form to report their income, gains, losses, and deductions. To fill out this form, you'll need to ensure that you have all the right information readily available.
To avoid facing penalties, you must report accurate financial information to stay compliant with local tax laws. If you need assistance in this process, try reaching out to The Platinum Group.
Calculating the tax credit you will receive can be slightly tricky. Since the program was rolled out in two phases, you’ll need to ensure that you are eligible to receive the credits in either or both periods. The calculation is based on eligible wages paid and qualified expenses between March 13, 2020, and December 31, 2021.
Eligible wages were essentially gross wages and health expenses that were paid to the employees retained during the period. Similarly, qualified expenses included the cost of providing health benefits.
Lastly, to calculate the ERC, you must follow the instructions in Form 941-X and input your eligible wages and qualified expenses for each quarter. If you need assistance in calculating your ERC, contact The Platinum Group today to make this process a lot simpler.
To report ERC on Form 1120-S, there are several steps to follow. The first step is to fill out Part I of Form 941-X to claim the ERC for the relevant quarter. Then, complete the worksheet for Form 941-X to determine the amount of the ERC. Next, transfer the amount of the ERC to Form 8974.
On Form 1120S, the ERC should be reported on line 13e. The total amount of qualified wages and healthcare expenses used to calculate the ERC should be reported on line 13f. It's important to ensure that the ERC is reported accurately, as any errors can result in penalties or delays in processing.
The deadline to claim ERTC is right around the corner, so you’ll need to hurry up and claim yours. While the process may seem tedious, there is one way you can make it easier. We recommend that you work with The Platinum Group to avoid any errors. With their vast experience, you’re bound to enjoy working with them!