IRS Notice 2020-54 and W2s

Hello, AZEA. 

Thank you for reaching out to the Community. Let me share some insight about guidance in Notice 2020-54. In QuickBooks, once you've set up payroll items for National Paid Leave FMLA, then QuickBooks Desktop will finalize the tax tracking of the payroll item and will update this when you submit W2 by the end of the year and ensure the compliance to IRS. 

To set up  National Paid Leave FMLA, Here's how: 

1. Go to the Employees menu and choose Manage Payroll Items. Then, select New Payroll Item.
2. Select Custom Setup and select Next.
3. Press Addition. Then  Next.
4. Give your pay type a name, such as National Paid Leave FMLA, in the text field and tap Next.
5. Select COVID-19 Expenses (or whatever you named the expense account) as the expense account, and then Next. 
6. Under Tax Tracking type window, Select National Paid Leave FMLA, then Next.
7. In the Taxes window, click Next.
8. In the Calculate Based on Quantity window, select Neither, and then select Next.
9. In the Default Rate and Limit window, make sure the rate is at 0 and the limit is at $10,000, tap One Time Limit from the Limit Type drop-down,
10. Click Finish.  

For more detailed information about it. Please refer to this article: How to track paid leave and sick time for the coronavirus. 

Also, you can read through IRS website about IRS issue guidance on reporting qualified sick and family leave wages paid. 

Stay in touch with me if you need anything else. I'll be happy to assist you again. Have a great day!