What is the Employee Retention Credit?

The Employee Retention Credit is a fully refundable tax credit for employers equal to 50% of qualified wages (including certain qualified health plan expenses) that Eligible Employers pay their employees. This Employee Retention Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for an Eligible Employer for qualified wages paid to any employee is $5,000.

Eligible employers can get immediate access to the credit by reducing employment tax deposits they are otherwise required to make. Also, if the employer’s employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS.

Because this credit can apply to wages already paid after March 12, 2020, many struggling employers can get access to this credit by reducing deposits or requesting an advanced credit on Form 7200, Advance of Employer Credits Due To COVID-19.

For details see IRS website FAQs: Employee Retention Credit under the CARES Act and Employee Retention Credit.

It is recommended to work with your accountant or CPA to determine which program(s) under the CARES Act will be best for your business.

NOTE: Sage is closely monitoring government reporting (e.g. 941). This document may change as more information becomes available.
Reporting for PPP (Paycheck Protection Program) loans will not be required until Q2, for more information refer to KB article ID 104298, DocLink: Reporting for the CARES Act (H.R. 748) Paycheck Protection Program.

The following reports in Sage 100 can be used to help with the reporting requirements.

For Gross to Net wages for each employee: (Earnings, Taxes, Deductions)

1. Check History Report:
   • Selection Criteria = By Check Date Range
   • Check Date range = 3/12/2020 through 12/31/2020
   • Uncheck the Print Check Details checkbox
   • Select Print Earnings, Print Deductions, Print Taxes, Print Recap checkboxes

Earnings, Deductions and Taxes summarized for each employee will print on the report.

Employee/Employer Benefit costs

• Check History Report:
  1. Selection Criteria = By Check Date Range
  2. Check Date range = 3/12/2020 through 12/31/2020
  3. Uncheck the Print Check Details checkbox
  4. Select Print Earnings and Print Deductions checkboxes

Earnings and deductions summarized by employee/earnings code and employee/deduction code will print on the report.

-OR-

• If fringes are employer contribution deductions, then you can use the Deduction Report. (Note: this report only prints by quarter, which will include YTD).
  1. In the Deduction Code selection, select the deduction codes. If there are multiple deductions that are not within a range separate each code by a comma.
• If fringes are earnings, then you can use the Earnings Report. (Note: this report only prints by quarter, which will include YTD).
  1. In the Earning Code selection, select the earning codes. If there are multiple earnings that are not within a range separate each code by a comma.

Tax Liabilities

• Employer’s Expense Summary-Tax Deposit Liability (Note: this report is only available to print during each payroll run)
• Quarterly Tax Report – this report will print QTD and YTD employee and employer taxes print for each employee (NOTE: We are still awaiting federal guidance for the reporting requirements for the new emergency pay wages. Until the IRS has released that information you will need to use the Employers Expense Summary reports to get your tax liabilities because the Quarterly Tax Report has not been updated to include the emergency wages and taxes as of yet).

If you set up specific Earnings Codes to track these pay wages.

• Check History Report:
  1. Selection Criteria = By Check Date Range
  2. Check Date range = 3/12/2020 through 12/31/2020
  3. Uncheck the Print Check Details checkbox
  4. Select Print Earnings checkbox

Earnings summarized by employee/earnings code will print on the report.

-OR-

• Earnings Report. (Note: this report only prints by quarter, which will include YTD).
  1. In the Earning Code selection, enter the earning codes, if there are multiple earnings that are not within a range separate each code by a comma

NOTE: For additional assistance customizing reports and/or creating documents please contact your Consultant or Business Partner.

REPORTING UPDATE: In Sage 100 Payroll 2.20.2, a new worksheet was included to help assist you with determining your Employee Retention Credit reported on the 941 form. For more details, refer to KB article ID 105461, DocLink: My Qualified wages for the Employee Retention Credit and Sick and Family Leave credit are missing on the 941 form.