If you are in the process of applying for the Employee Retention Tax Credit, the ERC, then one of the most important pieces of documentation you need to lay your hands on is your payroll.
Now the trick is to get the payroll in the proper format. Not providing this information in the correct format is the number one reason for causing your analysis and application to be delayed so you want to get this right. This means that the file you provide to us must:
1. Be in spreadsheet format. This means either in Excel or CSV format. The tax attorneys performing the analysis on your file must be able to sort your payroll data, which means it must be in a spreadsheet format. Under no circumstances can a PDF document be used
2. The spreadsheet must cover the time period of March 16, 2020 through September 30, 2021. This is essentially from the start of the pandemic through the third quarter of 2021, which is the final quarter that qualifies for the ERC.
3. The spreadsheet must have a line for EVERY check issued to EVERY employee during the applicable time period. Often times we will receive summary data on each employee and this will not work. We have to see every check to every employee.
If you manage your payroll through a third party provider then they are capable of generating this report for you. You just have to be persistent and tell them what you need.
Here you see a properly formatted payroll file that was generated out of quickbooks. Note that we can see the date and gross wages for every check issued to this employee by the company.
If you have any questions please feel free to send me an email at mike@frascogna.com.
