Our small company pays the employee portion of Washington State Medical and Family Leave for our three employees. We are not required to pay the employer portion because we have less than 50 employees. I record the portion we pay for the employees as an expense but ADP includes this as part of wages on the W-2 so our books don't match the W-2. Not sure how to rectify and our CPA told us that ADP should not report this way.
Hi there, annethomas22.
Thank you for visiting the QuickBooks Community. I'll be sharing details on how Washington Paid Family and Medical Leave work. Then, ensure you'll be routed to the right support team to assist you further on this matter.
Washington has conducted Paid Family and Medical Leave. All employers within the state of Washington State (with very few exceptions) need to report their employees’ wages and hours and pay premiums each quarter. Then, have the option to check out the WA Paid Family & Medical Leave website and their Premiums Calculator to learn about your rates.
However, since you've mentioned that you're using ADP software to handle your payroll transactions, I suggest contacting their support team. They can pull up your account to check the setup for Washington Paid Family and Medical Leave so they'll be able to confirm if you have to pay the said tax.
Lastly, you may refer to this article to view details as to when should an employee be marked as exempt from tax in QBDT: Set up tax-exempt employees.
Don't hesitate to let me know if you still have questions about managing your Washington Paid Family and Medical Leave or concerns with your company file. I'm here to assist you every step of the way. Stay safe and have a wonderful day ahead.
Thank you for the information. My specific question is whether the employee portion of the FL/ML that is paid by us, the employer, is taxable income for our employees? ADP says yes, and my CPA says no. It is included on the W2/W3. I have contacted ADP three times and they say it is correct. I have also contacted the Family and Medical Leave Dept. here in Washington and they could not give me and answer. Thank you!
We'll confirm this by calling the Family and Medical Leave Department again, @annethomas22.
I appreciate all of your efforts for your employee's family and medical leave on the QuickBooks Desktop.
To get a specific or most suitable answer, I'd recommend contacting the Family and Medical Leave Dept. in Washington again. Their support will examine your company if the amount you paid for your employees is taxable.
If you communicated with them and got some details, please let me know in the comments section or contact our customer service team. We may help you to correct your books and W2s information. You can also ask your accountant for help in ensuring your books match the W2.
Furthermore, if you've employees with tips or income, they'll require salary adjustments to ensure that tip income is not included in the reported wage. Run the payroll check-up to help you with missing information, discrepancies, wages, taxes amounts, and others. For more knowledge, check out this link: Set up Washington Paid Family and Medical Leave. Directly go to Frequently Asked Questions.
Moreover, visit these articles below on how to troubleshoot w2 issues and know general state or agency information:
I'd like to know what happens after contacting the Family and Medical Leave Department because I want to make sure that everything is settled for you. Reply to this post, and I'll get back to you. Take care, annethomas22.