How to book COVID-19 funds in your GL

Our goal as your national association is to raise bookkeepers’ professional status by making sure you are always up to date on your professional skills and knowledge.

Here’s just one example from the current issue of our member newsletter, The General Ledger:

Postponement of 2020 payroll tax deposits. Employers can postpone payment of 2020 employer Social Security taxes. Half of the postponed amount is due by Dec. 31, 2021; the remainder by Dec. 31, 2022. There are no changes to employee Social Security taxes.

Example. WinCo’s monthly payroll is $8,000. During 2020, no employee’s pay exceeds $100,000. WinCo accrues SS tax of $496 a month ($8,000 x 6.2%). WinCo postpones payment of these taxes for 9 mos., from Apr. 1–Dec. 31, 2020, and accrues this liability as follows:

WinCo records wage expense and employee SS payable (not postponed):

Wage Expense 8,000
Employee SS Payable 496
Net Payroll Payable 7,504


WinCo records payment of employee SS tax (due on the normal deposit dates):

Employee SS Payable 496
Cash 496


WinCo records monthly employer SS tax payable:

Employer SS Expense 496
Employer SS Payable 496


Sometime before the end of 2021, WinCo records payment of the first half of the postponed employer SS tax of $2,232 [$496 monthly × 9 mos. = 4,464 x 50% = $2,232]:

Employer SS Payable 2,232
Cash 2,232


Sometime before the end of 2022, WinCo records payment of second half of the postponed employer SS tax of $2,232 [$496 monthly × 9 mos. = 4,464 x 50% = $2,232]:

Employer SS Payable 2,232
Cash 2,232


But how do you record a PPP loan . . . interest on the loan . . . and forgiveness of the loan?

How do you book the Refundable employee retention tax credit (ERTC)? . . . the per-employee wage ceiling . . . the maximum quarterly credit?

And what’s the best way to book leave/family leave refundable payroll tax?

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