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15401: 5884-A - Employee Retention Credit (Credit for Affected Disaster Area Employers)

Fed Returns Generally

Where do I enter information for Form 5884-A?

Form 5884-A is used to calculate the "Credit for Affected Disaster Area Employers" (Drake19 and prior) or the "Employee Retention Credit" (Drake20). Use screen 588A to calculate the credit for eligible taxpayers (individuals, partnerships, s-corporations, co-operatives, estates, and trusts).

The Consolidated Appropriations Act, 2021 contained changes to Form 5884-A. As of February 17, 2021, the IRS has not released the 2020 Form 5884-A. Drake Software will update the form available in Drake Tax as soon as possible after the IRS releases it. 

1040 and 1041 Packages

If the taxpayer is a partner, shareholder, or beneficiary of a partnership, s-corp, or fiduciary, the K1P, K1S, or K1F received will include the applicable code-- simply select it from the Credits drop list on the appropriate data entry screen. For example, on the K1P screen select “5884-A” from the Credits drop list:

On screen 588A, enter the total qualified wages paid or incurred on the applicable line(s). From the drop list, indicate if the amounts should flow to Schedule C or Schedule F (1040 and 1041 packages only). If more than one Schedule C or F is included in the return, indicate which Schedule C or F should receive the 5884-A amounts using the Multi-form code field.

Business Packages (except 990 and 706)

On the 588A screen, enter the total qualified wages paid or incurred on the applicable line(s). In general, you must reduce the deduction by the amount reported on line 2 of the 5884-A form.  Select the Do NOT adjust the expenses for the credit amount check box if you do not want the program to make this reduction for you.

990 Packages

Open the CRED screen, available from the Credits tab of the data entry menu. 

  1. Select the activity type, whether passive or non-passive. 
  2. If the credit is from a “pass-through” entity, such as a partnership, enter the entity’s EIN.
  3. Select 5884-A from the Description drop list.
  4. Enter the amount of qualified wages paid.

Additional Information

Hurricane Disaster Employee Retention Credit

Eligible employers who continued to pay wages after their business became inoperable because of damage from Hurricane Harvey, Irma, or Maria may be able to claim a credit equal to 40% of up to $6,000 of qualified wages paid to each eligible employee.

An eligible employer is one who conducted an active trade or business in a designated hurricane disaster zone on these dates and whose business was inoperable on any day after these dates and before January 1, 2018 because of damage sustained from the designated hurricane:

Starting  Disaster
August 23, 2017  Hurricane Harvey
September 5, 2017 Hurricane Irma
September 17, 2017 Hurricane Maria

Eligible Employee 

An eligible employee is an employee of an eligible employer whose principal place of employment on August 23, 2017 (Hurricane Harvey), September 5, 2017 (Hurricane Irma), or September 17, 2017 (Hurricane Maria), with the employer, was in a designated hurricane disaster zone.

Qualified Wages

Qualified wages are those the employer paid eligible employees on any day after August 23, 2017 (Hurricane Harvey), September 5, 2017 (Hurricane Irma), or September 17, 2017 (Hurricane Maria), and before January 1, 2018.  The amount of qualified wages is limited to $6,000 per employee.

More Information

For more information, see About Form 5884-A and the 5884-A Instructions.

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