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Level 1

CARES Act Payroll Tax Credit

My company is using Intuit payroll services. We have no control over adjusting the payroll taxes deposits.

Due to CARES Act, the small businesses have an option to take a credit for paid sick leave wages against federal payroll taxes. How Intuit is planning to make this option available? We could potentially already save our cash flow but it is impossible with the current set up.

Thank you.

Solved
Best answer April 14, 2020

Best Answers
Highlighted
Level 2

CARES Act Payroll Tax Credit

In QBO, you can add the Coronavirus-related payment types now so that they are tracked correctly.

 

As far as the tax credit issue,  you  can request a refund on the credit with FORM 7200 from the IRS.gov website.  Instructions and the form are very straightforward 

 

 


@Mariia wrote:

My company is using Intuit payroll services. We have no control over adjusting the payroll taxes deposits.

Due to CARES Act, the small businesses have an option to take a credit for paid sick leave wages against federal payroll taxes. How Intuit is planning to make this option available? We could potentially already save our cash flow but it is impossible with the current set up.

Thank you.



@Mariia wrote:

My company is using Intuit payroll services. We have no control over adjusting the payroll taxes deposits.

Due to CARES Act, the small businesses have an option to take a credit for paid sick leave wages against federal payroll taxes. How Intuit is planning to make this option available? We could potentially already save our cash flow but it is impossible with the current set up.

Thank you.



@Mariia wrote:

My company is using Intuit payroll services. We have no control over adjusting the payroll taxes deposits.

Due to CARES Act, the small businesses have an option to take a credit for paid sick leave wages against federal payroll taxes. How Intuit is planning to make this option available? We could potentially already save our cash flow but it is impossible with the current set up.

Thank you.


 

View solution in original post

29 Comments 29
Highlighted
Community Champion

CARES Act Payroll Tax Credit

Lets start with a few facts, first of which is the employee must request the leave pay, you do not automatically pay it out until asked

 

1.Qualified sick or medical care leave subject to credits cannot be for any days prior to 4/1

2.  The first portion of fully paid leave is for up to 80 hours OVER a two week period which in essence means you ought to change your paid through dates and you would start paying this next week upon which you could deduct the credit by as early as the following Wednesday when next Friday's taxes would at the earliest for semi-weekly depositors be due,

3. The 2/3 pay has to follow either 2 weeks of no pay or 2 weeks of the special sick leave - this means, to me, you cannot start off with the 2/3 child at home pay until 2 weeks form now

Highlighted
QuickBooks Team

CARES Act Payroll Tax Credit

Hi Mariia. Changes are coming daily to QuickBooks Online Payroll, Intuit Online Payroll and QuickBooks Desktop Payroll.

 

Thank you for your patience as we work to support you. The Families First Coronavirus Response Act goes into effect with leave taken April 1, 2020 and after.

 

Our payroll teams here at Intuit are working quickly to create the appropriate pay types so that you can track and report hours towards this tax credit for your small businesses.

 

Per the Act, if an employee was impacted and took time off for COVID-19 related issues prior to April 1, 2020, the time would be tracked as regular sick hours and is not eligible for any tax credits at this time. 

 

We will be updating all customers whenever these changes are implemented. If you have any other questions or concerns feel free to reach out here. 

Highlighted
Level 1

CARES Act Payroll Tax Credit

You are referencing the FFCRA leave and credits. The question references the CARES credits. They are two different credits.

Highlighted
Level 1

CARES Act Payroll Tax Credit

The question references the CARES credits and what Intuit will be doing about that. Not the FFCRA leave and credits. Any word on what Intuit has in the works for the CARES credits?

Highlighted
QuickBooks Team

CARES Act Payroll Tax Credit

Hey there, CPBGeek.

While we don't have a update at this time we will soon. Please stay tuned to our QuickBooks Blog.  We'll be putting any updates or guides there. I'm here as well to help.

Highlighted
Level 1

CARES Act Payroll Tax Credit

How can we record the use of ERC within Quickbooks Desktop to keep a running total? It would be ideal for the liability window to be correct and reflect the credit being used for the payroll tax deposits. Any insight?

Highlighted
QuickBooks Team

CARES Act Payroll Tax Credit

Hi SSLPC. Right now we're working on an update to QuickBooks Desktop to accommodate for the CARES act.

 

We will be updating it as soon as possible until then I do appreciate your patience and we have an article on How the stimulus package benefits small businesses and self-employed that may be of use to you.

 

Keep an eye on the article as well for updates about the situation. Let me know if there's anything else at all I can do for you. 

Highlighted
Level 1

CARES Act Payroll Tax Credit

CARES Act payroll tax credits apply to payroll after MARCH 12th. So will you be helping with revised returns and/or refunds for payroll runs after that date? I tried to stop the filing of my 1Q20 tax return filing for this very reason, but I was told it was unable to be stopped. The govt will be getting cash that we really could have used for cash flow purposes...

Highlighted
QuickBooks Team

CARES Act Payroll Tax Credit

Hi lclaytor23.Once the funds are transmitted it is out of our hands. You would have to contact the IRS about how you can be credited for the overpayment amount. 

Highlighted
Level 2

CARES Act Payroll Tax Credit

You request a refund on the credit with FORM 7200 from the IRS.gov website.  Instructions and the form are very straightforward

Highlighted
Level 2

CARES Act Payroll Tax Credit

In QBO, you can add the Coronavirus-related payment types now so that they are tracked correctly.

 

As far as the tax credit issue,  you  can request a refund on the credit with FORM 7200 from the IRS.gov website.  Instructions and the form are very straightforward 

 

 


@Mariia wrote:

My company is using Intuit payroll services. We have no control over adjusting the payroll taxes deposits.

Due to CARES Act, the small businesses have an option to take a credit for paid sick leave wages against federal payroll taxes. How Intuit is planning to make this option available? We could potentially already save our cash flow but it is impossible with the current set up.

Thank you.



@Mariia wrote:

My company is using Intuit payroll services. We have no control over adjusting the payroll taxes deposits.

Due to CARES Act, the small businesses have an option to take a credit for paid sick leave wages against federal payroll taxes. How Intuit is planning to make this option available? We could potentially already save our cash flow but it is impossible with the current set up.

Thank you.



@Mariia wrote:

My company is using Intuit payroll services. We have no control over adjusting the payroll taxes deposits.

Due to CARES Act, the small businesses have an option to take a credit for paid sick leave wages against federal payroll taxes. How Intuit is planning to make this option available? We could potentially already save our cash flow but it is impossible with the current set up.

Thank you.


 

View solution in original post

Highlighted
Level 1

CARES Act Payroll Tax Credit

I understand the concept of a tax credit but why does the payroll preview show as if the credit is being applied to the actual payroll as in instantly deducted from the payroll run? For example if you run an $8,000 payroll and you have $4,000 in "credits" the total amount of the payroll cost on the payroll dashboard widget says $4,000. It is a little misleading...

Highlighted
QuickBooks Team

CARES Act Payroll Tax Credit

Hello there, @jmg2020

 

I completely understand how confusing times like this may feel. You've come to the right paid to get some answers. I'd be happy to help show you the different reports you can run to review those tax credits.

 

After you've run your payroll, there are several different payroll reports, including the Payroll Details ReportPayroll Summary Report, and also the Tax Liability Report as well. These reports will show you how many hours you've used in these tax credits, and they'll automatically apply to your liability. 

 

Below are a few helpful articles you can refer to for additional information with tracking your tax credits:

 

If you have any more questions or concerns, I'm always here to lend a hand and help. Have a good one!

Highlighted
Level 1

CARES Act Payroll Tax Credit

I am trying to follow the instructions to setup the necessary payroll items.  Under "CARES Retention Credit (Payroll Item)", item 4 says "On the Other tax window, select CARES Retention Credit, and then Next." When you get to this step, there is no "CARES Retention Credit" to select in the other taxes dropdown box.  

 

Kind of hard to follow the setup instructions when all the necessary items aren't there.

Highlighted
QuickBooks Team

CARES Act Payroll Tax Credit

Hello there, @willmart.


I know how challenging the process is, but I’m here to help you out.


You’ll want to update your payroll tax table to a new version so your payroll function will continue working. Here’s how:

 

  1. Go to the Employees menu.
  2. Choose Get Payroll Updates.
  3. Select the Download Entire Update checkbox.
  4. Click the Download Latest Update.


You can read this article about FAQs on QuickBooks Payroll updates for more details.


I also added an article to guide you thoroughly on how to set up your payroll and track the credit: How to set up and track the Employee Retention Credit under the CARES Act.


I’m always here if you need more help. Take care.

Highlighted
Level 1

CARES Act Payroll Tax Credit

Where does one find the Quickbooks Blog you are referring to??  I am following this topic closely.

Highlighted
QuickBooks Team

CARES Act Payroll Tax Credit

Hello there, @srp1621 .

 

In this site, you can read the latest news and updates from QuickBooks including product improvements. 

 

I'm adding this link to be routed in our QuickBooks Blog: https://quickbooks.intuit.com/blog/.

 

If there anything you need, leave a comment here. I’m just around to help.

 

Highlighted
Level 1

CARES Act Payroll Tax Credit

@MadelynC , I have the exact same issue as @willmart.

I followed all the update steps for both Quickbooks (desktop) as well as the payroll updates.  The only options available are state specific.  What am I doing wrong?

Highlighted
QuickBooks Team

CARES Act Payroll Tax Credit

Thank you for posting here in the Community, @CVD1.

 

Let me guide you on how you can set up employees and add to CARES Act.

 

Here's how:

 

Set up your employees with the pay types

  1. Go to Employees, then select the employee you'd like to add the CARES Act pay types to.
  2. In the Pay section of the Employee Overview screen, click the Edit button
  3. In the What additional ways do you pay your Employee section, under the CARES Act section, select the pay types that apply to you: either the CARES Act Regular or CARES Act Overtime.
  4. If applicable, select and enter any Employer Paid Health Insurance Premium amount to be tracked on each check.
  5. Click OK.

Refer to this article for additional information: How to set up and track the Employee Retention Credit under the CARES Act.

 

This article can also help you in the future for more information about Care Act: Understanding the Affordable Care Act Employer Mandates.

 

Feel free to post any additional questions here in the Community. The QuickBooks team is always here for you. Have a great day.

Highlighted
Level 1

CARES Act Payroll Tax Credit

@Joseph_A, thank you for your response.  The link that you posted below:

https://quickbooks.intuit.com/learn-support/en-us/help-articles/how-to-set-up-and-track-the-employee...

is broken, I think the problem is the trailing A.

I followed very carefully the instructions at:

https://quickbooks.intuit.com/learn-support/en-us/help-articles/how-to-set-up-and-track-the-employee...

Notice that I removed the trailing A.  Had the exact same issues as @willmart above.

When I get to Step 2: Set up the 3 payroll items, CARES Retention Credit (Payroll Item), Item 4: On the Other tax window, select CARES Retention Credit, and then Next.  I do not have the 'CARES Retention Credit' available, I only have state specific tax types.  I am using Quickbooks Desktop Pro 2020 with Enhanced Payroll.  Perhaps the author of the instructions @MadelynC might help.

With regards to your suggestion, when I pick the first employee in the 'Employee Center', there is no 'Employee Overview' screen.  The 'Edit Employee' window opens instead and there is no What additional ways do you pay your Employee section.  I see a 'Payroll Info' window but it only has the Payroll Schedules, Earnings etc.  Am I looking int he wrong place.  I chose the 'Employees > Employee Center' menu item.

 

 

Highlighted
QuickBooks Team

CARES Act Payroll Tax Credit

Thank you for coming back here in the Community, @CVD1.

 

I've tried to look for additional information with your issue. I've found out more updated steps from the previous one that I've provided.

 

To setup CARES Retention Credit, here's how:

  1. Go to the Employees menu, then Manage Payroll Items.
  2. Choose New Payroll Item, select Custom Setup, then click Next.
  3. Select CARES Retention Credit on the Other Tax window, then next.
  4. On the Name used in paychecks and payroll report window, enter CARES Retention Credit, then Next.
  5. In the Agency for company-paid liability window, select Payroll liabilities in the Liability account dropdown, then select Payroll Expenses then Next.
  6. From the Taxable Compensation window, click Finish.

Check this article for additional information about CARE the can help you in the future: How to set up and track the Employee Retention Credit under the CARES Act.

 

Let me know if I can be an additional help. Please post any additional questions here in Community. 

Highlighted
Level 1

CARES Act Payroll Tax Credit

@Joseph_A thanks for the prompt reply.  That is exactly what I tried to do but the CARES Retention Credit in step 4 is not available.  I only see state specific items.  Please let me know if there is anything else I can try. Perhaps @MadelynC can help.

Highlighted
Community Champion

CARES Act Payroll Tax Credit

Just a note: keep in mind that the original question was definitely related NOT to retention credits but to the FMLA leave pay credits against all federal FICA and FWT liabilities.  It can be used in conjunction with (but for different wages) PPP loans. The CARES Employee Retention credits of 50% CANNOT be utilized IF you received a PPP loan.

Highlighted
Level 1

CARES Act Payroll Tax Credit

Thank you for the clarification.  Makes perfect sense.  I am trying to post a more detailed response sine yesterday evening but I keep getting the same error message:

"Correct the highlighted errors and try again. There was an error while attempting to post your message. Try again in a few minutes."  There are no highlighted errors in my response so I am  not sure what the problems is.  @Joseph_A Perhaps a Quickbooks employee can take a look at the logs and figure out why the posting does not work.  BTW - I still do not have an answer to the issue:  the CARES Retention Credit in step 4 is not available.  I only see state specific items.

Perhaps @MadelynC can help.

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