I appreciate you for joining this thread, swang.

Since you're using QuickBooks Assisted Payroll, I suggest contacting our Assisted Payroll Team. They can pull up your account in a secure environment and guide you on how to apply Families First Coronavirus Response Act (FFCRA) payroll item. I understand that you've already tried reaching us with the same concern. However, this issue can be best addressed by our Assisted Payroll Team who are trained to be experts in this field.

For instructions on how to reach them, follow the steps below:

1. Go to this link.
2. Click the Contact us button.
3. Enter your company information.
4. Click Submit.

Please take note our operating hours for chat support depend on the version of QuickBooks that you're using. Please see this article for more details: Support hours and types.

I'll be right here if you need help with anything about QuickBooks. You take care and have a great day ahead!

Thank you for your suggestion. I have both spoken and completed online chats with QB assisted payroll. The answers regarding ARPA have been varied and contradictory. They have however consistently asked me to contact my accountant for further assistance regarding payroll tracking for ARPA. My accountant has understandably referred me back to my payroll company. I think this forum will be my best hope. For example, a payroll rep told me that I would need to void and re-post the paychecks in order to add the correct payroll item once intuit software developers had set up the ARPA payroll items. But a recent post on this forum explained that the paycheck can be unlocked and payroll items can be changed so that they can be tracked correctly. This forum is definitely my best hope.

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 / helps some others - back to processing about 25 more of these changes!  

You got to talk to someone on the phone about ARPA?  How did you make that happen?  I got in the queue for a callback, only to have the agent tell me I had to talk to the PPP department, which appears to be online chat only, and then the person in chat said I was in the wrong place.

@Mcsbend, can you share the steps you take for documenting the qualified leave itself on a paycheck?  I find the instructions provided by QuickBooks to be ambiguous, and my attempts at talking to someone from QB directly who can actually answer my questions has been futile so far.  No one I talked to today, on the phone or by chat had any idea what ARPA even was, which was...concerning, at best.  No in-and-out applies for us, as we were not recording anything under the FFCRA items.

Yes, as I was reading the QB reply to your question about how to set up the payroll items in the QB product in order to track the applicable credits, I was befuddled that their reply referred to the paycheck protection program. I don't feel the guidance offered by QB has been very good at all in respect to which payroll tax items we need to specify as affected by these new payroll items we are being told to set up. Very frustrating, and seems like they are giving 'canned' responses and not really reading the questions we have submitted!

I found the page to set up the payroll items (https://quickbooks.intuit.com/learn-support/en-us/set-up-payroll/how-to-track-paid-leave-and-sick-ti...) but I'm confused as to what to do with the item in step four which is the national paid leave credit.  Is this the credit used for the employer social security tax?  I see there is still the Medicare tax credit but I see no social security tax credit so I need to know where that comes into play when you are creating a paycheck.  The instructions for implementing these items really doesn't cover what it is to be used for.

Step 4: Confirm you have a new National Paid Leave Credit tax item, or set it up

You should have a new tax item automatically added in your payroll item list called National Paid Leave Credit. If you don't see this tax item, follow the steps below to set it up.  You'll need this to ensure you're tracking the tax credits.

1. Go to the Employees menu, then Manage Payroll Items, then select New Payroll Item.
2. Select Custom Setup, then select Next.
3. On the Payroll item type window, select Other Tax, then select Next.
4. On the Other Tax window, select National Paid Leave Credit, then select Next.
5. In the Name used in paychecks and payroll report window, enter National Paid Leave Credit in the text field, then select Next.
6. In the Agency for company-paid liability window, select the agency you pay taxes too from the dropdown, select COVID-19 Expenses in the Liability account dropdown, and select COVID-19 Expenses (or whatever you named the expense account) in the Expense account dropdown, and then select Next.
7. From the Taxable Compensation window, select Finish.

Next steps with the FFCRA

Hello Donna Lewis5!

Thanks for joining us here. Let me explain about the National Paid Leave Credit tax item.

The National Paid Leave Credit tax item is to support the receipt of an employer-paid leave credit because of COVID-19. It is used to get your tax credits once you’ve given your employees paid leave. In addition, this tax credit includes the employer’s share of Medicare.

Please check this article from IRS: COVID-19-Related Tax Credits for Paid Leave Provided by Small and Midsize Businesses FAQs. This explains more about the refundable tax credits for qualified sick leave and family leave wages.

Comment again here if you have additional concerns. We'll help you!

Thank you AlexV.  I do recall after having submitted this question that the National Paid Leave Credit item is used when recording your 941 liability payment in QuickBooks and includes the wages (and other allowable credits) as well as the Medicare Credit to reduce the liability deposit by the credit.  

I do not see anything in QuickBooks payroll item setup to support the Social Security credit for the employer, however.  The IRS.gov website states that an employer may reduce the federal employment taxes that are deposited in a quarter by the qualified leave wages, allocable health plan expenses, certain collectively bargained contributions, and the employer's share of social security and Medicare taxes imposed on the qualified leave wages paid in that calendar quarter.  I want things to flow through correctly onto the 941 form as well as track the Covid Expenses correctly.  There is a Medicare Credit but I do not see a Social Security Credit.  Does this mean the Social Security credit only comes through after all 941 deposits have been paid for a quarter and the 941 form is filed?  Is there no way to track the social security credit and reduce the liability prior to the quarter end?

Thank you AlexV.  I do recall after having submitted this question that the National Paid Leave Credit item is used when recording your 941 liability payment in QuickBooks and includes the wages (and other allowable credits) as well as the Medicare Credit to reduce the liability deposit by the credit.  

I do not see anything in QuickBooks payroll item setup to support the Social Security credit for the employer, however.  The IRS.gov website states that an employer may reduce the federal employment taxes that are deposited in a quarter by the qualified leave wages, allocable health plan expenses, certain collectively bargained contributions, and the employer's share of social security and Medicare taxes imposed on the qualified leave wages paid in that calendar quarter.  I want things to flow through correctly onto the 941 form as well as track the Covid Expenses correctly.  There is a Medicare Credit but I do not see a Social Security Credit.  Does this mean the Social Security credit only comes through after all 941 deposits have been paid for a quarter and the 941 form is filed?  Is there no way to track the social security credit and reduce the liability prior to the quarter end?

Thanks for getting back here, Donna Lewis5.

I'd like to share some steps where you can include the information.

For paychecks created April 1, 2021 to September 30, 2021 paid leave is now subject to Employer Social Security tax. If you already have the National Paid Leave Employee and National Paid Leave Family payroll item, let's edit it by following these steps:

1. Go to the Employees > Manage Payroll Items > View / Edit Payroll Item List.
2. Right-click on the payroll item and select Edit Payroll Item.
3. Click Next until you get to the Taxes section.
4. Select the taxes you want to include.
5. Hit Next and then Finish.

Here's a sample screenshot for a visual reference:

As for the credit, you'll want to run a Quick Report to see balances.

Here's how:

1. Go to Chart of Accounts, then select the COVID-19 Expenses account. This can include all 5 National Paid Leave payroll items:
   • National Paid Leave Employee sick
   • National Paid Leave Family Leave
   • National Paid Leave FMLA
   • National Paid Leave Employer health Insurance cost
   • National Paid Leave Medicare credit
2. Select the Reports drop-down and choose QuickReport.
3. Click Customize Report. In the Columns box, type in Qty then select it.
4. Hit OK. This will show you the quantity (hours) on the items used.
5. Update the dates to reflect the paycheck date you are looking for. The amount should show all the payroll items you’ve set up and run payroll on. The amount in the Total column reflects the amount of the Credit you can enter on the Liability check.

Please let us know if you have any follow-up questions regarding the process. We're always here to help. Keep safe.

Thank you again for a quick response.  The thing is, based on the guidelines that I have read, the taxes are correct because with the American Rescue Plan Act, there should be company social security tax, just like there is company Medicare tax.  You have a Medicare Credit however for the company Medicare tax but you do not have a Social Security Credit for the company social security tax on the ARPA paid sick wages.  This is the part that changed from the National Paid Leave to the American Rescue Plan Paid leave.

The National Paid Leave Medicare credit item (type: company contribution, tax tracking: National Paid Leave - Medicare) puts the company paid Medicare tax into the Covid19 expense and if set up correctly reduces the Medicare expense by the company portion since it can be claimed as a credit.  As of right now the company social security tax does not go in to the Covid expense because there is no payroll item to tell it to.  So when you pull the Covid Expense report for your tax credit to apply to to your 941 deposit, the wages, health care credit, and Medicare tax are there but not the social security tax credit that the IRS says you can take.  

I don't want to change the tax in the payroll item setup for for fear that it won't appear correctly on the 941 because the company social security tax should be calculated for ARPA wages paid after 4/1 but before 9/30.  It flows to line 5a on the 941 form.  I believe, however, there should be a credit for it just like the Medicare credit to put it to the Covid expense and reduce the social security expense by the company portion, since the IRS says it can be claimed prior to filing the Form 941.  Or is this something that an employer is just going to have to remember to manually calculate (and risk error) to get the credit.  Not sure how it would be recorded either since the National Paid Leave credit is mapped back to the Covid expense account and if you used it and included the social security amount, then the Covid expense account will be incorrect because it did not contain the company social security tax for the ARPA wages paid to begin with.

I set up the 3 new payroll items, ARPA Sick Leave Emp, ARPA Sick Leave Family, and ARPA Sick Leave FMLA that are tax tracked to the correct tax tracking.  I don't believe there is a new item for the National Paid Leave Health Credit or for the National Paid Leave Medicare Credit and that you continue to use those same items as necessary. I just can't figure out how to get the company social security tax on the ARPA wages to go into the Covid Expense account and to still flow into the Form 941 correctly since those wages and taxes must flow through to the line 5a.

Does this make sense?

Hello, Donna Lewis5. 

I appreciate you for getting back to us with additional information. Let me chime in about the ARPA concerns.

When setting up the payroll item for ARPA, you'll have to make sure that you're using the appropriate affected accounts. 

Also, I would suggest consulting your accountant for guidance on the proper account to use. This is to ensure the accuracy of your books. 

This article will help your employees find relief from Covid-19 with paid leave: Under the American Rescue Plan, employers are entitled to tax credits for providing paid leave to em....

Leave a comment below if you have follow-up concerns regarding the issue. I'll be around to help.

Thank you Glinette.  I actually work in an accounting firm and I'm researching this for a client.  I've read the article you have hyperlinked.  I understand the new paid leave.  The problem is when you create a paycheck in QuickBooks Desktop using the ARPA items, it now includes company social security tax, as it should.  However, the company social security tax is going to the FICA liability account, as it should, as well as the FICA expense account, as it should, there is no way to get just that amount of company social security tax based on the ARPA wages into the Covid Expense account.  The ARPA items are set up to go to the Covid expense account as well as the Health credit and the Medicare credit, but there no item that allows the company social security amount (just on the ARPA wages) to go to the Covid expense account which is where this client would look to determine the credit. 

So based on trial and error, I found that if you put the company social security tax into the National paid leave Medicare credit (along with the company medicare) it will then put it into the covid expense.  The only problem with this is that if the accounts are broken out  into separate Medicare expense and Social Security expense for the company instead of a single FICA expense, then it will only reduced the Medicare Expense account and not the Social Security.  Long story short, I thank you for your input but I figured it out on my own.

Also I would like to address RenjolynC's suggestion to change the old National Paid Leave items and just update the tax information...I think this is not correct at all.  The old payroll items are set up to the correct tax tracking for that time period and the paid leave that was applicable in that time period and it would also track items to worksheet one and a separate line on the 941 form.  If an employer used those items previously, it has the potential to change prior periods if you were to update the payroll item.  So by simply changing the tax in the old National Paid Leave items, potentially could create a mess on the current form 941.  My advice to everyone is to create the new items separate form the National Paid Leave items to avoid a bigger mess.   

Cada did you ever get an answer from support? If you did please share. I have the same questions. there is a separate line item for the ARPS aside from CARES retention. I'm thinking I might just set up a new payroll item called ARP following the instructions for the CARES that hopefully will land on the 941 on the correct line.

I would think that you would do an amended 941-X....just my 2 cents.

Thanks for joining this thread, @FOE3865.

It seems that my colleague, @JoesemM, answered your concern about CARES Act in a separate thread posted a while ago. You can read the content through this link: https://quickbooks.intuit.com/learn-support/en-us/employees-and-payroll/re-ertc-under-american-rescu....

Also, I've added this article that you may want to look at for more details about CARES Act and PPP funding: American Rescue Plan Act Provides PPP Funding and Tax Breaks.

If you have other questions or concerns about QuickBooks Desktop Payroll, feel free to leave a comment anytime. I'm always ready to help you out. Stay safe and have a great rest of the day!

I work for an accounting firm who assists a client with QB Desktop Enterprise.  I have the payroll updated to the most recent version 22114 and I do not see the ARPA tax tracking types only the National Paid Leave.  Why are they missing?

I work for an accounting firm that assists a client with QB Enterprise.  I am trying to add in the ARPA additions and there is no ARPA tax tracking type, just National Paid Leave.

Hi there, @stephanieMinistryCPA. 

I'll hop on to this thread and give a brief update about the American Rescue Plan Act. 

The IRS has provided new guidance about paid leave and sick time due to the coronavirus. The ARPA addition is just recently added into QuickBooks Desktop Payroll. You can use this to pay and track wages for an employee who is affected by the COVID-19.

If you have already set up an account to track paid leave for paychecks before April 1, 2021, you can follow these steps to set up the ARPA payroll item. 

For National Paid Leave Employee and National Paid Leave Family

1. Go to the Employees menu and select Manage Payroll Items, then click New Payroll Item.
2. Select Custom Setup, then click Next.
3. Choose Addition (Employee Loan, Mileage Reimbursement) and click Next.
4. Give your pay type a name, such as National Paid Leave EE or National Paid Leave Family, then select Next.
5. In the Expense account window, select COVID-19 Expenses (or whatever you named the expense account) and click Next. 
6. In the Tax tracking type window, select the paid leave type, then select Next.
   • For paychecks dated before April 1, 2021, choose the pay such as National Paid Leave EE or National Paid Leave Family.
   • For paychecks dated after April 1, 2021, choose National Leave ARPA - Emp or National Leave ARPA - Family.
7. In the Taxes window, select Next.
8. Choose Calculate this item based on Quantity in the Calculate Based on Quantity window, and then click Next.
9. In the Default Rate and Limit window, set the rate for the following items. 
10. Ensure the Limit Type is Annual, restart each year, and then select Finish.

Please take note that you need to determine your employee’s benefit and hourly rate first before you can give your employees this sick leave.

If you're still unable to see this tax tracking type, I'd recommend updating QuickBooks Desktop to its latest release. This way, we can refresh and update the program. 

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

I have updated the QuickBooks Enterprise to the most recent Payroll Updates ver 22114 and those ARPA items are missing from the list.  They only list National Paid Leave-Emp and so on.  The wages were earned after April 1, 2021.  The National Paid Leave ARPA Credit is also missing when I try to create the "Other Tax" to track the credit.

I tried to work with QuickBooks Desktop help but the individual clearly had no idea what to do and I ended up wasting 45 minutes explaining what the issue was, having her help me go through the process of creating the additions - with the National Paid Leave-Emp etc instead of the ARPA ones.  No help whatsoever.

I have "National Leave ARPA-Emp" selected as my Tax tracking type.  I press Next and get to the Taxes screen.  When I try to uncheck "Medicare Company," "Medicare Employee" also gets unchecked.  I need "Medicare Employee" to stay checked.  Same for "Social Security Company."  I need "Social Security Company" to stay unchecked and "Social Security Employee" to stay checked.  

Hello, ninjeh.

I appreciate you for providing us with information about your concern. Allow me to chime in about American Rescue Plan Act (ARPA).

As per IRS both Social Security (SS) and Medicare for employee and employer are taxable. 

Also, I would suggest consulting your accountant for guidance on the proper account to use. This is to ensure the accuracy of your books.

Once you confirmed the correct taxable items, you can create liability adjustments because credit is not subject to the employer portion so that this will not be included in the payroll report and tax forms.

Here's how:
 

1. Go to the Employees menu, then choose Payroll Taxes and Liabilities.
2. Select Adjust Payroll Liabilities. 
3. Use these tips to help complete the fields.
        Use the same date as the last paycheck of the affected quarter. Use today's date if you’re working on the current quarter.
        The Effective Date is used to calculate amounts on your 940 and 941 forms as well as the Payroll Liability Balances Report.

4. Select if the adjustment is for the company or an employee?
        Select Employee Adjustment if the item you're adjusting is company-paid. It updates the YTD info reported on the employee W-form.
        Select Company Adjustment if you want the balance to be removed from the Payroll Liability Balances Report.

5. Complete the Taxes and Liabilities fields.

6. Select Accounts Affected and then OK.
        Select Do not affect accounts to leave balances unchanged for the liability and expense accounts.
        The adjustment will only change the year-to-date amounts on your payroll reports.
        Select Affect liability and expense accounts to enter an adjusting transaction in the liability and expense accounts.
        Repeat for other employees if you need to, and select OK.

Refer to this article for more detailed information: Adjust payroll liabilities in QuickBooks Desktop.

For future reference, check out this article to help you learn about reconciling an account in QuickBooks Desktop. 

Feel welcome to get back on this thread if you'll need assistance in dealing with payroll tasks. We're always here to help you.