Adjustments to April payroll for change from FFCRA to ARPA

I wanted to share information about the change from FFCRA to ARPA, @Mcsbend.

When creating adjustments, we use if and then as a general instruction for any adjustments because the amounts recorded are different from each other. With these amounts and how to record them to each payroll item properly, I'd recommend consulting an accountant for professional advice.

You can create a new payroll item for ARPA, then follow these steps to create your payroll as normal to track your taxes:

1. Go to the Employees menu, and select Pay Employees.
2. In the Enter Payroll Information window, select Open Paycheck Detail to make modifications to the paycheck.
3. Remove all existing items in the Earnings window.
4. In Other Payroll Items, add the payroll items you set up that apply to your employee’s situation. 
5. Next to each used:

• • National Paid Leave Employee/National Paid Leave Family: Add the employees’ hourly rate and quantity of hours for the pay period. If your employee is salaried, you must determine their hourly rate.
  • National Paid Leave FMLA: Add the appropriate amount if applicable.
  • National Paid Leave - Health Premium: Add the National Paid Leave - Health Premium using the same amount as your normal company-paid health insurance premium unless it was prorated. Leave your Health Insurance company contribution item as you will still need it to track the amount to pay to your insurance company.
  • National Paid Leave & Medicare Credit: Add the same amount you see under Company Summary next to Medicare Company.

      6. Select Save & Next to repeat for all employees and click Save & Close.

      7. When the checks are ready to be created, select Continue then, click Create Paychecks.

For the step-by-step guide to help you out with this, you can reference this article for more insights:  How to track paid leave and sick time for the coronavirus. This will give you other links and particular processes to set up in your account.

For additional references, you can check these articles and the latest guide from SBA and Treasury:

• Correct year-to-date (YTD) additions or deductions on a paycheck when the wrong tracking type was us....
• American Rescue Plan Act provides PPP funding and tax breaks.

Let me know if you need further assistance with this. I'm always around to provide answers and clarifications. Have a great day ahead and stay safe.

I created the new ARPA payroll items for May, but the instructions say to do an "in and out" change for what we paid under FFCRA in April.   I don't know if I can just edit the check to be a different payroll item (i.e. change it from National Paid Leave - FFCRA to National Paid Leave - ARPA) or if there are other steps we have to tax to ensure the credit.   Quickbooks sometimes answers it's just a simple "in and out" and others to just "consult a tax professional".   It'd be great if some clear answers for everyone in this situation could be provided. 

It's good to see you here, @Mcsbend,

You can update your payroll version to apply the recent changes for the payroll tax items. Our developers recently updated it to release version 22110. This includes new tax tracking types used to provide employees with paid sick or paid expanded family and medical leave. Due to changes in taxability as defined in the American Rescue plan Act of 2021 (ARPA) these new tax tracking types replace similar tax tracking types used previously as defined in Families First Coronavirus Response Act (FFCRA) of 2020.

See this link for more information: Latest payroll news and updates.

Use these steps to download it:

1. Go to the Employees tab, and select Get Payroll Updates.
2. You'll see the tax table version beside the Payroll Update Info button. (Please see this sample screenshot.)
   
3. If it's not showing the correct version, click the Download entire payroll update radio button then press Update.

If the reporting is still incorrect, I suggest getting in touch with our Support Team for adjustments. Please note that all our representatives are currently available through chat or messaging. You must enable pop-up windows on your browser settings to launch the chat box and connect with our live agents.

To get our Support, follow the steps below:

1. Open QuickBooks and click the Help menu.
2. Select QuickBooks Desktop Help.
3. On the pop-up screen select Contact us.
   
4. Click the Search for Something else button then type your concern in the Ask us anything box.
5. Hit Search then scroll down to get your contact options.

Let me know how it goes. I'll be right here if you need further help. Have a good one!

To those watching these threads like myself:   I did some trial / error tonight in trying to get payroll paid correctly and thought I'd share what I did -- hopefully it's right & if so helps others. 

 I had already updated my payroll and set up the new tax tracking for the ARPA.   The only difference in these payroll items is that that TAX TRACKING is different - for payroll through 3/31/21 you use the original national paid leave that has a tax tracking that does NOT charge SS to the employer for the gross of those funds.  For payroll 4/1/21 and after use the new payroll item / associated tax tracking that is National Paid Leave ARPA.  This new payroll item w/ the new tax tracking makes Quickbooks calculate employer's SS contribution on the amount paid to the employee through the national paid leave. 

Then in order to retroactively fix the payroll item I used in April while doing May payroll I took the following steps: 
Print a Payroll Summary for April that details what I paid for each employee w/ National Paid Leave.  

On the May payroll - in the "other" I first entered their May (if applicable) National Paid Leave Employee ARPA. (uses the new tax tracking.  Double check it is correct by multiplying the gross of regular income plus NPL income by .062 - this should be what shows under Company Paid SS.  If it doesn't go back to your payroll item list & check the tax tracking that it actually says ARPA for what you are doing)

Then on a second line, I entered as a Deduction their April amount of National Paid Leave Employee (FFCRA)   (you have to have two separate payroll items since they are each linked to a different tax tracking type) 

On a third line, I entered as an ADDITION their April amount with the new National Paid Leave Employee ARPA.  This completes the in/out - i.e. out of the wrong payroll item & into the new 

Redo the payroll summary.   It should show all of what was paid under the old payroll item zeroed out for April.   In May, there should be the addition of April's under the new payroll item / subtraction of gross amount of the old payroll item so the gross payroll stays the same while the SS for Employer increases.

It will be terribly confusing to employees if they actually look at their paystub and see the in/out lines. However, in theory, this will correct the additional amount owed for employer SS (including what was owed for April & now May) and make the corrections balance when it comes time to file 941s.   

Hopefully this makes sense & is correct!   It seems to make sense based on the calculations & before/after reporting at least!