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Looking for the accounting entry to use for funds I received as an individual under the US Cares Act

TDuvallTDuvall Member Posts: 26

I am using Wave for my personal accounting and for my husband's business separately. His business income is recorded on Schedule C of Form 1040 as a sole proprietorship. I use TurboTax for my tax software.

We received payments under the Federal Coronavirus Relief Law (CARES Act), and I am trying to determine how it will affect my taxes.

I know that I will not owe income taxes on the cash and do not need to include it as part of your taxable income on my return. I have read that the payment is technically being structured as an advance on a temporary, refundable tax credit, but I don’t really understand the impact of that. Does anyone know exactly what the accounting entry for this would be, and what lines it will actually hit on my return? Will it be like the tax credit I get under the ACA?

in Accounting Technical Support

Comments

  • TDuvallTDuvall Member Posts: 26

    Specifically, I'm asking about the cash payment that was sent out by the IRS, $1,200 for adults, $500 (I think) for children.

    We did get a PPP, but I'm not sure the AICPA has finalized their recommendations on that.

  • JordanDJordanD Member Posts: 515 ✭✭✭

    Hey @TDuvall The Wave Support Team is able to tell you help with functionality related questions in Wave, however are not trained to the intricacies of accounting, especially as it applies to jurisdictional COVID related entries as these vary from state to state (US), and province to province (CAN). For this reason, I'd recommend reaching out to an accounting professional to confirm how these entries should look, or using our Wave Pro section in the community to get some online Accounting help. You can find that section of the Wave community here: https://community.waveapps.com/categories/find-a-wave-pro

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