Where to Report ERTC on 1120S?

If you are a corporation that files Form 1120S, you may wonder where to report the Employee Retention Tax Credit (ERTC). Here are some important facts to know:

• Form 1120S: Form 1120S is used by S corporations to report their income, deductions, gains, and losses[1]. To report the ERTC on Form 1120S, eligible S corporations should use Form 5884-C, which is the form specifically designed for claiming the ERTC[2].
• Line 13d: On Form 1120S, the ERTC should be reported on line 13d, labeled "Other credits" and including a space for "Employee retention credit" specifically[3].
• Qualified Wages: The ERTC is based on qualified employee wages during the eligible period. For employers with more than 500 full-time employees, qualified wages are limited to wages paid to employees not providing services due to a full or partial suspension of operations or a significant decline in gross receipts[4][5]. S corporations should ensure they have accurate records of qualified wages paid during the eligible period to claim the credit correctly.

It's important to note that the ERTC has undergone updates and changes since its introduction. S corporations should stay updated with the latest IRS guidance and consult with tax professionals to ensure compliance with eligibility requirements and maximize the benefits of the credit[1][4][5][6].

In conclusion, S corporations that file Form 1120S can report the Employee Retention Tax Credit (ERTC) using Form 5884-C and should report the credit on line 13d of Form 1120S. By understanding the reporting requirements and staying informed about IRS guidelines, eligible S corporations can use this financial incentive to retain their employees during challenging economic times.