Yes, taxpayers are not allowed to “double dip” when it comes to tax credits. As such, any wages that were utilized in generating Employee Retention Credits are not allowable as qualified research expenses. The good news here is that the pool of affected wages will be small because the ERC allows for the inclusion of R&D tax credit excluded line items such as health benefits and 401k payments. The basic equation is as follows:
ERC Impact Amount Calculation:
| Quarterly ERC Wage Amount (for all qualified quarters) by Employee |
Less: | ERC Health Care Cost Amount (for all qualified quarters) by Employee |
Less: | 401k Contribution Amount (for all qualified quarters) by Employee |
Equals: | ERC Impact Amount by Employee |
R&D Total Wage Amount Calculation:
| W2 Box 1 Amount by Employee |
Less: | ERC Impact Amount by Employee |
Equals: | R&D Total Wage by Employee * |
* This is the wage amount you will input in the GOAT.tax platform for each employee.
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