FFCRA payroll items

Good evening, SRowe44. 

We recently released an update on how to track paid leave and sick time due to the coronavirus. Rest assured that during this chaotic and difficult time, we are working diligently to make sure everything is operating as smoothly as possible. 

The link above will guide you in how to:
 

- Determine your employees benefits and hourly rate

- Set up your liability and expense accounts for the paid leave

- Set up payroll items

- And set up new tax items

I'd definitely recommend checking out the link, as its chopped full of useful information. 

If you need guidance on anything else, let me know here. Have a wonderful weekend!

Using the link that you provided I set up the accounts and the payroll item as directed.  I then ran a test for FFRCA pay.  Yes it correctly took all taxes (FWH, FICA, Medicare) out of the employee pay.  As far as the employer tax it matched for both FICA and Medicare and it should only match for Medicare.  Then I ran a form 941 - box 2 wages is 0 (wrong), box 5a/5c taxable social security and taxable medicare is correct.  This money will be considered wages to the employee and a wage expense of the employer.  The credit that is taken for the wage and medicare match will be considered income to the employer.  Please direct this to the programmers.  In my opinion the set up is not right.  I have clients that need this fixed for a payroll run on 4/5.

I agree that there is a problem with the set up of FFCRA items in QuickBooks with the latest update.  Under Step 3, the payroll items  for Sick and Extended Family Leave default to deducting employer Social Security tax.  The guidance states that employers are not required to pay Social Security tax on FFCRA leave; only employees are required to pay Social Security tax on these items.   Also, if I run sample paychecks now, I can see that for the federal tax deposit I am not getting any credit for the paid FFCRA leave, for Employer Medicare taxes, or for health insurance credits.  These should be showing up as credits against the amount of tax due with my regular tax deposit, and they are not.  I also have a payroll to run on April 6 that includes FFCRA leave.  Can you please address these issues as the most recent update does not address them.  Thank you.

Hello there, @CHP 1.

Allow me to join the thread and help share a little more information about your concern, so you can run payroll and review your taxes in QuickBooks.

Since you already identified what pay leave types that you will use for your employee's situation. Let's enter the paid leave type in your payroll, here's how:

1. Click the Workers tab and then Employee.
2. Choose employee you’d like to add paid leave too.
3. In the How much do I pay an employee section, select the +Add additional pay types.
4. Select the correct paid leave type.
5. Hit Done.

Then, run the payroll and include the paid leave type on the paycheck to track your tax credits, so you'll get compensated: 

1. Go to the Workers tab and select Employees
2.  Click Run payroll.
3. Select a pay schedule, then Continue.
4. Enter the hours the employee worked and used for the paid leave in the fields.
5. Hi the Preview Payroll 
6. Review everything, and then tap Submit Payroll.

Once done, review the payroll that you've created. Under the FFCRA act, you'll get credit towards your Federal Tax deposit for the wages paid. To make sure that you've tracked it correctly you can run these payroll reports, it includes your tax credit:

• Payroll details report
• Payroll Summary report
• Tax Liability report

You can browse these articles it provides updated information on what to do and know about Families First Coronavirus Response Act:

• What you need to know about the Families First Coronavirus Response Act
• Pay employees under the Family First Coronavirus Response Act
• QuickBooks business resources and tax info for Coronavirus (COVID-19)

You’re always welcome to post if you have any other concerns. I’ll be around to help. Stay healthy and be safe.

Sorry.  I'm doing desktop payroll and these instructions may be for online?  I've tried this a couple of times after setting up the payroll items as described in the instructions, including a payroll item for health insurance credits.  When I go to pay scheduled liabilities, the system is not applying any credits to the FIT, Social Security and Medicare reported on the paychecks.  And the system is also reporting employer Social Security expense on the paychecks equal to the employee portion, when it should not be reporting any employer Social Security for amounts paid using the FFCRA pay types. 

Sorry, I'm doing desktop payroll and these appear to be instructions for online?  I've attempted this a couple of times using the instructions to set up the payroll items, including health insurance credits, and the "new tax item", but this is not working.  When I create paychecks, one of which includes the FFCRA payroll items, and review the scheduled liability payment for federal taxes, there is no credit for either the sick leave or health insurance.  Also, on the paycheck with the FFCRA payroll items, employer social security is being recognized as an expense and employers are not required to pay social security tax on FFCRA leave payments.

Thanks for getting back to us, @CHP 1.

Yes, you're right the steps provided above are for QuickBooks Online Payroll.  Let me help share information on how to do it in QuickBooks Desktop.

Since you'll already know the applicable paid leave to your employees, you can set these accounts to track the eligible wages to use the tax credits later on. Follow the steps below:

To create the liability account.

1. Click Lists in the left menu, and then select Chart of Accounts.
2. Tap the Account ▼ dropdown, then select New.
3. Choose Other Account Types, select Other Current Liability and select Continue.
4. Give your liability a name, such as COVID-19 Liabilities, in the Name field.
5. Fill out the necessary information.
6. Hit Save and Close.

To create an expense account.

1. Go to the Lists menu, then select Chart of Accounts.
2. Select the Account ▼ dropdown, then select New.
3. Choose Expense, then select Continue.
4. From the Account Type dropdown, select Other Expense.
5. Give your expense account a name, such as COVID-19 Expenses, in the Name field.
6. Fill out all the necessary information.
7. Hit Save and Close.

Then, we can set up your payroll items and new tax item to make sure you're tracking the tax credits. Just proceed to step 3 and step 4 of this article: How to track paid leave and sick time for the coronavirus.

Once done, you need to select the paid sick leave payroll item once you run payroll to generate an accurate pay for your employees.

Also to ensure that you track it correctly, you can review your payroll reports.

You can browse this article it provides updates on how QuickBooks help you during these challenging situations: QuickBooks business resources and tax info for Coronavirus (COVID-19.

Let me know how it goes or if you have follow-up questions about this. I'll be here and ready to help anytime. Take care always.

I have followed the instructions multiple times, and it is not working correctly.  First, as mentioned, Social Security is being expensed for the employer portion (employers are not required to pay Social Security on these payroll items); second, the credits for the payroll items are not posting anywhere, most importantly as a credit against the federal tax deposit that is due.  Can a programmer review this?  Thanks.

Thanks for keeping us posted, CHP 1.

I want to make sure this will get addressed right away and I'd like to redirect you to the right support.

Since none of the troubleshooting steps don't work on your end, I suggest contacting our QuickBooks Customer Care Team. They'll be able to determine the root cause of this issue and can pull up your account and do a remote session.

To contact them, here's how:

1. Open QuickBooks.
2. Go to Help, then QuickBooks Desktop Help.
3. Choose Contact Us.
4. Give a brief description of your issue, then hit Continue.
5. Pick how you want to get contacted.

In case you need tips and related articles in the future about the "How Do I" steps in QuickBooks Desktop, visit our QuickBooks Community help website for reference:

If you have any follow up questions, please let me know. I'm here for you. Have a great day!

I am having the same issues as CHP 1.  I have followed the instructions exactly.  Can you please post an update here on steps the programmers are taking to correct this?

Hi SDS1,

Since you've already followed the steps mentioned by @JoesemM. and it's showing an incorrect amount, I suggest reaching out to our support team to help you verify the correct setup. They also have the tools to pull up your account in a secure environment. 

You can use this link to get a quick response: Contact Support.

For more information about FFCRA, please check this article: The Families First Coronavirus Response Act.

Reach out to us if you need further assistance. We'll always make sure to help. 

I called Intuit and discussed their incorrect payroll set up both in not subject to employer match of 6.2% of FICA,  how the credits are not working and how this is compensation to the employees and shouldn't be an other expense on the profit & loss.  I provided the IRS guidance on this topic.  The response I received was the back office is now aware.  They said to follow the instructions they provided and in the next few weeks they will assist to get this corrected and to apply the credits correctly.  This will not be helping us run these payrolls this week and to get the credits to reduce the payroll tax liability in order to get the advantage of the credits.  Personally I plan to just hand adjust the payroll tax payment to the correct numbers and fix it later.  Good luck!

Thank you for posting your update, SRowe44.  It is so helpful to know that we're not all crazy!  I would like to also add that I have been unable to find a way to list the applicable health insurance premium that should be available for the credit.  I believe we need a place under employee set up to input this amount so that the credit calculates properly on a per diem basis.

100000% agree with you CHP1, the QB desktop (and online payroll) setup is INCORRECT for the calculation of the Employer's portion of the SS on qualified pay items.  It seems that every QB team member that replied was not listening to what you were saying and just immediately replied with the steps on how to setup the pay items.  Setting up the pay items per the instructions is not the problem, the Intuit programming on the taxability of the pay items is wrong.  

Glad our office isn't the only one who caught this mistake in programming!

Also still not seeing any instructions or guidance on how to actually TAKE these credits against the 941 tax payments.  We are assisting our clients to hand calculate with the assumption that we will have to probably delete and rerun the liability payments at some point in the system to get them to fit in with the tracking/reporting guidelines that will eventually be written into the software.

QBs instruction below under Step 4 is not correct....there is no such thing as National Paid Leave Credit under the Other tax window.  So what is the correct instruction or does something need fixed???

1. On the Payroll item type window, select Other Tax, then select Next.
2. On the Other tax window, select User-Defined Tax from the Other tax dropdown, and then select Tax is paid by the company.
3. On the Other tax window, select National Paid Leave Credit, and

Hello, Dr Doug. 

What we'll select on the Other tax section is the User-Defined Tax from the Other tax dropdown, and then select Tax is paid by the company. After that, we'll have to enter National Paid Leave Credit in the Name used in paychecks and payroll reports section. Then, proceed with the Agency for company-paid liability. Select None under Tax tracking type.

Once we're done with setting up the items, we can now proceed in running a regular payroll with the payroll items we selected. After running payroll and taxes have been withheld, here's how to claim my tax credits under the Family First Coronavirus Response Act. 

Let me know if you need more help. Keep safe!

I am having trouble with the payroll item set up for the paid leave.  When I do it as per the instructions and set the new item up as an "addition" rather than a "wage" item (step 3 in the QB instructions), it is not calculating any taxes at all.  Am I the only one having this issue?  

Hi there, stephanie39. 

It can be daunting to set up all this new info, especially with all the information coming out left and right, so I would like to help you get to the bottom of your problem. Following the steps per this article "How to track paid leave and sick time for the coronavirus" should properly set up the payroll item. Could you possibly give a step-by-step break down of whats happening? Maybe a screen shot if possible as well. 

Thank you in advanced for that information, it will allow us to see exactly whats going on, on your end. 

I was on the phone with Tech Support for 3 hours yesterday and followed all their instructions and I knew it still didn't make sense.  I ran payroll today even though I knew it was wrong.  My hope is they will have this fixed by next week.  I have to give the associate grace as she tried her best to help me.

Thank you for your input.  It's nice to know I haven't lost my mind.

@stephanie39I'm seeing the same thing.

Intuit - What are we missing?

Hey there, Ryan Jamison. 

Thank you for reaching out to the QuickBooks community. Try following the steps listed in the following link, If set up correctly, everything should work as desired. If it still doesn't work, can you provide me with a screen shot of the issue? That way I can see exactly whats going on.  

- How to track paid leave and sick time for the coronavirus. 

Thank you and hope you're having a nice afternoon. 

Look at the attached pdf.  You can see there is a difference in the process under Step 3.  When I followed the second option that says to select "neither", it worked.  Please fix that in the first section under Step 3.

Thank you.

See my reply to Nick M.  Took me forever to figure it out.  Now to figure out the tax side......

Thanks for replying, @stephanie39. 

I'm happy to hear that the information my colleague @Nick_M provided worked for you. 

You can also check out the Pay employees under the Family First Coronavirus Response Act article for additional information. 

I wish you the best, and I'll be here if you have any other questions.