cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

CARES Act & PPP Program

I'm a bit overwhelmed with all the different programs available to us during COVID-19.  We did get money for the SBA grant that was awarded for up to $10k.  This is a grant that does not have to be paid back.  We also go approved for the SBA loan that may or may not have to be paid back.  We are using the $8k grant as that is "given" money but we may or may not need to use the SBA loan.  I saw a quickbooks Tax update regarding all of these programs.  Do I need to run payroll differently during this time whether I am using the loan or not?  Again, I will be using the $8k of "given" money that does not have to be paid back and did set up a sub account to show that money.  And I will be setting up a liability account for tracking the loan, but do I also need to do something else when I'm running payroll as it talks about new tax tracking types and I'm not sure how to change that.

Solved
Best answer April 20, 2020

Best Answers
Highlighted
QuickBooks Team

CARES Act & PPP Program

Hi, eamarshall. I understand there's a lot going on right now. You can count on the Community to be here to help.
 

To track paid leave and sick time for employees affected by COVID-19, the first step is determining their benefits and hourly rates. Under the FFCRA, there's a few different benefit types:

  • National Paid Leave Employee - Your worker is sick and under quarantine.
  • National Paid Leave Family - The employee is taking care of a family member who's sick or impacted with COVID-19.
  • National Paid Leave FMLA - They're taking leave under the Family Medical Leave Act (FMLA) to care for children under the age of eighteen whose school or child care is closed.
  • National Paid Leave Health Credits - Use this if you're contributing to an employee's health insurance during the period they're being paid under FFCRA privisions. You can track this amount and a credit will be applied to your federal tax liability.


In most cases, you'll pay your employees at the same hourly rate you've paid them over the last six months. However, there are a few exceptions that correspond with the regular rate of pay under the Fair Labor Standards Act (FLSA).
 

If an employee is on commission, you'll need to create an hourly rate for them. Their rate under the FFCRA needs to be equal to the commission paid over the last six months and divided by their hours worked in the period.
 

For tipped employees, you'll need to make sure that you include the workers tipped income when entering their leave or FMLA. Review the amount of income they received over the last six months, and then average it out over the number of hours they worked during the same period. You'll need to change the employee's pay rate during this time and ensure you're paying them at least minimum wage as required under the FLSA, your state, or local jurisdiction.
 

After determining each employee's benefit type and hourly rate, you can proceed with setting up your expense accounts, payroll items, and tax items. Once everything is setup, you can run payroll as normal. Here's an article with detailed steps on how to do this: How to track paid leave and sick time for the Coronavirus
 

In regard to loan forgiveness for the Paycheck Protection Program, you can use this new calculator feature on our website to estimate how much is forgivable: Intuit Aid Assist - Loan Amount and Forgiveness Calculator
 

I'll be here to help if you have any questions. Have yourself a wonderful day!

View solution in original post

7 Comments
Highlighted
QuickBooks Team

CARES Act & PPP Program

Hi, eamarshall. I understand there's a lot going on right now. You can count on the Community to be here to help.
 

To track paid leave and sick time for employees affected by COVID-19, the first step is determining their benefits and hourly rates. Under the FFCRA, there's a few different benefit types:

  • National Paid Leave Employee - Your worker is sick and under quarantine.
  • National Paid Leave Family - The employee is taking care of a family member who's sick or impacted with COVID-19.
  • National Paid Leave FMLA - They're taking leave under the Family Medical Leave Act (FMLA) to care for children under the age of eighteen whose school or child care is closed.
  • National Paid Leave Health Credits - Use this if you're contributing to an employee's health insurance during the period they're being paid under FFCRA privisions. You can track this amount and a credit will be applied to your federal tax liability.


In most cases, you'll pay your employees at the same hourly rate you've paid them over the last six months. However, there are a few exceptions that correspond with the regular rate of pay under the Fair Labor Standards Act (FLSA).
 

If an employee is on commission, you'll need to create an hourly rate for them. Their rate under the FFCRA needs to be equal to the commission paid over the last six months and divided by their hours worked in the period.
 

For tipped employees, you'll need to make sure that you include the workers tipped income when entering their leave or FMLA. Review the amount of income they received over the last six months, and then average it out over the number of hours they worked during the same period. You'll need to change the employee's pay rate during this time and ensure you're paying them at least minimum wage as required under the FLSA, your state, or local jurisdiction.
 

After determining each employee's benefit type and hourly rate, you can proceed with setting up your expense accounts, payroll items, and tax items. Once everything is setup, you can run payroll as normal. Here's an article with detailed steps on how to do this: How to track paid leave and sick time for the Coronavirus
 

In regard to loan forgiveness for the Paycheck Protection Program, you can use this new calculator feature on our website to estimate how much is forgivable: Intuit Aid Assist - Loan Amount and Forgiveness Calculator
 

I'll be here to help if you have any questions. Have yourself a wonderful day!

View solution in original post

Highlighted
Level 1

CARES Act & PPP Program

Thank you for your detailed reply.  At this time, we do not have anyone out on leave and hope it stays that way.  We have been approved for a loan to use if cash flow becomes tight to continue to meet the needs of the company as well as pay our employees since our workflow has been reduced.  If we "dip" into the loan to make ends meet, I guess that's where I needed clarification for now on if I have to do anything with taxes and such.  If we do need to pay someone out on leave, I will follow your guidelines for that portion but hope I don't have to do that.  Thankfully we are a small company so less of a chance for this to happen. 

Highlighted
QuickBooks Team

CARES Act & PPP Program

Hey there, eamarshall. 

 

Thanks for coming into the QuickBooks Community. I know how confusing times like these can be, but don't worry, I'm here to shine some light what you need and get you going in the right direction. First-things-first, your loan that you got approved for, If you do find yourself having to dip into it. You'll want to set it up as either a Short term or Long term Liability. Both options entirely depend on whether or not you plan on the loan being forgiven. 

 

Short Term Liability:

 

If you do plan on the loan being forgiven, set it up as a short term liability loan as the life of the loan is only 8 weeks long. 

 

Long Term Liability

 

If for any reason you do not see the loan being forgiven, set it up as a long term liability, as it will be repaid over a 2 year period. 

 

Follow the below steps to set up either Liability:

  • Select the Gear Icon at the top right corner
  • Under Your Company, select Chart of Accounts.
  • On the right, click New
  • Select Other Current Liabilities (If you know it will be forgiven) or Long Term Liability 
  • Choose a detail type, then select Next
  • Name the account. 
  • Leave the Unpaid Balance blank, then select Save

This will make sure if you do dip into the loan, you're set up accordingly.

 

If you have any other questions or concerns, feel free to post them here. 

 

Thank you for your time and patience, have a happy Monday. 

 

Highlighted
Level 3

CARES Act & PPP Program

Hi Nick_M,

 

I just saw your reply on setting up the short term liability in the chart of accounts.  That was most helpful.  I followed those instructions without any problem.  In my case I labeled the account as 2550 CARES Act Loan Payable.

 

One question: the PPP loan amount just got deposited in our bank account.  Should I go ahead and match that deposit to the new account that I created?  The default action it had wanted to do was match it to Accounts Receivable.  Thanks.

Highlighted
QuickBooks Team

CARES Act & PPP Program

Hello, eeei732. 

 

Thanks for stopping by the Community. I'm glad I could help you set it up. I suggest contacting your accountant for further advice on the loan.. If you need a ProAdvisor, check out the link below, they are experts in all things accounting. 

 

- Need a ProAdvisor?

 

If you have any other questions or concerns, feel free to post them here. 

 

Thank you and have a wonderful weekend. 

Highlighted
Level 3

CARES Act & PPP Program

 
Highlighted
Level 1

CARES Act & PPP Program

The link for a QuickBooks ProAdvisor is incorrect. That link leads to becoming a ProAdvisor.

 

Here is the link to the list of ProAdvisors. https://quickbooks.intuit.com/find-an-accountant/

Need to get in touch?

Contact us