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dianes-remax
Level 1

Covid social security deferral.

The more I read, the more confused I get.  Which side is actually being deferred.... the employee social security or the employer side?  And if it's the employer's portion, do we Have to defer?

Solved
Best answer September 09, 2020

Best Answers
MichelleBh
QuickBooks Team

Covid social security deferral.

Thanks for the quick reply, @dianes-remax.

 

It's my pleasure to explain to you further about the Social Security payroll tax deferral in QuickBooks Online (QBO). 

 

Yes, it is the employee side of social security that will be deferred in QBO. Please note that all employees earning less than $4,000.00 (before tax deductions) on a bi-weekly basis, or less than $104,000.00 (before tax deductions annually), would qualify for the payroll tax deferral. On the other hand, if an employee has already earned less than $137,700.00 in wages taxable to Social Security, they are not eligible for the deferment.

Also, they are not required to defer, even if you elect opt-in because this is voluntary.

 

Regarding the Social Security deduction of your employee, just leave it as is until the set up for Social Security (SS) payroll tax deferral is available in QBO. In the meantime, you can check our QuickBooks Blog provided by my colleague above for more updates and new enhancement. 

 

Also, employers can defer their social security payroll tax and can pay half by 12/31/20 and the other half by 12/31/21. It needs to be accounted for on the 941 forms. 

For more information about the Presidential Memorandum for deferral of employee Social security, please refer to the IRS website: FAQs: Employee Retention Credit under the CARES Act.

 

For future reference, you may check out these articles. These articles contain steps on how to set up SS payroll to accept and track the credit. Also, give insights about the CARES Act. 

 

 

Let me know if you have a follow-up question. I'm always here to help. Have a great day ahead!

View solution in original post

24 Comments
Candice C
QuickBooks Team

Covid social security deferral.

Hey there, @dianes-remax

 

Congrats on making your first post here in the Community. The deferral applies to any employee whose pretax wages or compensation during a biweekly pay period is less than $4,000. As of right now, we are still working closely with the IRS for additional guidance with this new tax deferral. 

 

There isn't a date set for this to be updated within your account. However, you can check out our QuickBooks Blog to get in the loop about new features within your product. 

 

For future reference, here's an article that can be helpful for your business: Track your deferral payments for Social Security tax payments

 

If you have any other questions or concerns, let me know. I'm always here to lend a helping hand. Wishing you and your business continued success. 

dianes-remax
Level 1

Covid social security deferral.

Thanks for the nice welcome.  It is appreciated.  But my questions weren't answered.  Is it the employees side of social security that gets deferred? Should I stop deducting SS from their paychecks?   And as the employer, do we pay both sides?

MichelleBh
QuickBooks Team

Covid social security deferral.

Thanks for the quick reply, @dianes-remax.

 

It's my pleasure to explain to you further about the Social Security payroll tax deferral in QuickBooks Online (QBO). 

 

Yes, it is the employee side of social security that will be deferred in QBO. Please note that all employees earning less than $4,000.00 (before tax deductions) on a bi-weekly basis, or less than $104,000.00 (before tax deductions annually), would qualify for the payroll tax deferral. On the other hand, if an employee has already earned less than $137,700.00 in wages taxable to Social Security, they are not eligible for the deferment.

Also, they are not required to defer, even if you elect opt-in because this is voluntary.

 

Regarding the Social Security deduction of your employee, just leave it as is until the set up for Social Security (SS) payroll tax deferral is available in QBO. In the meantime, you can check our QuickBooks Blog provided by my colleague above for more updates and new enhancement. 

 

Also, employers can defer their social security payroll tax and can pay half by 12/31/20 and the other half by 12/31/21. It needs to be accounted for on the 941 forms. 

For more information about the Presidential Memorandum for deferral of employee Social security, please refer to the IRS website: FAQs: Employee Retention Credit under the CARES Act.

 

For future reference, you may check out these articles. These articles contain steps on how to set up SS payroll to accept and track the credit. Also, give insights about the CARES Act. 

 

 

Let me know if you have a follow-up question. I'm always here to help. Have a great day ahead!

View solution in original post

TX317
Level 1

Covid social security deferral.

The employees payday is on the 15th (tomorrow).  We print out checks and have them signed today (14th) to hand out tomorrow.  They did not want  their share of the social security deducted, so we made an adjustment,  but when we sent the e-pay to the United States Treasury, the employers share of the social security was not made.  How do we correct this and pay the employers share of the social security?

IamjuViel
QuickBooks Team

Covid social security deferral.

Hello, @TX317.

 

Currently, there's no direct way to cancel your e-pay to the United States Treasury through QuickBooks. You'd have to do login to the EFTPS website and cancel it from there. 

 

Here's how:

  1. Go to the EFTPS website.
  2. Select Payments from the home page.
  3. Enter your EFTPS login credentials.
  4. Choose Cancel a Tax Payment.
  5. Follow the rest of the on-screen instructions to complete the exporting process.

You can read through this article for more detailed instructions: Cancel tax payments and forms.

 

On the other hand, the deferral of the employment taxes is not mandatory and employers can decide whether they want to opt-in. Rest assured, once updates are available, you'd receive an email notification about it. Also, it will be applied to your QuickBooks account once you download your latest payroll tax tables.

 

In the meantime, you can run payroll the way you do it in QuickBooks.  In the meantime, you can run payroll the way you do it in QuickBooks. You can read through these articles for more detailed instructions: 

Feel free to post again if you have more questions. I'll be around to help. Stay safe and well!

Sharee
Level 1

Covid social security deferral.

Hello there!

Do we know when this will be available to employees?

Almost all of my employees want to take advantage of the deferral but when I run payroll the SS tax is still being deducted from all paychecks.

Thanks in advance!!

SarahannC
Moderator

Covid social security deferral.

Hello there, Sharee. Thanks for joining here!

 

I can see how useful applying the tax deferral to all of your employees. As of the moment, deferment depends on the employee's earnings, as mentioned by my colleague MichelleBh above, so they'll be eligible.
 

For now, there's no specific time as to when the new tax deferral will be ready. I would encourage checking our blog website, so you'll be updated on the latest feature and product improvements.

 

Then, you can use this article to gather additional information about employee retention: Frequently Asked Questions.

 

Visit again if you have other concerns with QuickBooks. I'll be here to help you figure them out. Stay safe and be well!

KASPIN
Level 1

Covid social security deferral.

I have been advised by my accountant to opt-out of the payroll tax deferral. How do I make sure when I process my monthly payroll next Monday, Sept 28th that the taxes will not be deferred?  I wish to opt-out for both the employee and the employer deferrals. Please advise. Thank you!

katherinejoyceO
QuickBooks Team

Covid social security deferral.

Thanks for joining in this thread, @KASPIN. To opt-out payroll tax deferral, I'd recommend not update your payroll nor make any changes on your employee's paycheck. Just continue running your payroll like the usual way. 

 

Please check out our QuickBooks Blog page for some updates.

 

If you have other questions, please don't hesitate to go back to this thread. We're always here to help in any way we can. 

KASPIN
Level 1

Covid social security deferral.

Oh no! I was afraid of that and I have already done a payroll update. Is there anyway to reverse the payroll update and go back to the version which was in effect on Aug 31?? Are there any other solutions? My accountant wants me to opt out! Any advice would be appreciated, especially as my payroll must be processed on Monday. Tha k you so much! 

ShiellaGraceA
QuickBooks Team

Covid social security deferral.

Thanks for coming back, @KASPIN.

 

I'll share some information about reversing payroll update. The option to reverse payroll update isn't possible. To opt-out payroll tax deferral, you'll need to consult our Payroll Support.

 

They have tools that can assist you in creating payroll adjustment. Here's how to reach out:

 

  1. Go to (?) Help at the top, then select Contact Us.
  2. Enter a brief description of your case, then hit Let's talk.
  3. Choose Get a call. Type in your personal information.
  4. Click Confirm my call.

 

Once you're speaking with one of our phone agents, inform about the opt-out so you can create an adjustment.

 

Additionally, here's a guide that covers all tasks you can do when using the payroll feature: Commonly used articles to get started with Payroll. 

 

I'll be right here if you still have questions or concerns. Don't hesitate to reach out. Have a nice day ahead.

KASPIN
Level 1

Covid social security deferral.

Thank you so much! Can anyone tell me if the tax deferral is automatically done when you process your payroll? ( I have the assisted payroll subscription service so all of my taxes are calculated by the payroll service) I only process payroll 1 time per month so asking anyone out there who has processed weekly or biweekly payroll since Sept 1, 2020? Much appreciated anyone who can help! 

ShiellaGraceA
QuickBooks Team

Covid social security deferral.

Thanks for the quick response, @KASPIN.

 

For Assisted Payroll, it's best to get in touch with the Assisted Payroll Support. Though we follow the same guidelines for the CARES Act, the set up for this type of payroll service is different. I recommend contacting them for more information about the tax deferral.

 

Just follow the above steps to reach out to them.

 

This article further explains the deferral: How the Coronavirus Aid, Relief, and Economic Security (CARES) Act affects your payroll.

 

I'm happy to assist you again if you still have questions or concerns. Have a great rest of the week,

KASPIN
Level 1

Covid social security deferral.

I see the latest update has come out regarding the tax deferral. In a previous reply, you had mentioned not to do the payroll update and this is the update which deals with the employee SS tax deferral. My company wishes to opt-out of the deferral, we will not be deferring any taxes and will continue payroll as normal.  Two questions:

1. Should I ignore the update and just continue with the current payroll compliance update?

2. Does the latest payroll update (22016) automatically default to opting out of the deferral? 

 

I am worried if I do the update it will automatically defer the taxes which is not what I want to do for my business.  Any help will be appreciated! Thank you! 

Tori B
QuickBooks Team

Covid social security deferral.

Good morning, @KAPSIN. 

 

Thanks for following up with us. I'm happy to provide you some insight into the deferral payroll update. 

 

Great news, you can run the payroll update without it automatically opting in. In QuickBooks Desktop, it automatically opts out. You would have to agree with your employees to opt-in and then set it all up. If elected, the deferral only applies to paychecks created after enabling it. You can go ahead and update so the forms and tax amounts are correct. I've included an article below you find handy that covers more information about the deferral. 

 

 

Additionally, you can see our Employee Social Security Deferral FAQ for further information. 

 

Please let me know if you have any questions or concerns. I'll be here to help you every step of the way. Feel free to reach out to the Community at any time. Take care! 

KASPIN
Level 1

Covid social security deferral.

Fantastic! Thank you so much for the quick response, much appreciated!

Lsulynn
Level 1

Covid social security deferral.

HI- I did the update and it automatically set me up for the deferral. We are choosing not to deferral. How do I go back to where QB Desktop Pro calculates and deducts taxes as it did before the update? 

DivinaMercy_N
QuickBooks Team

Covid social security deferral.

Thanks for joining this thread, @Lsulyn.

 

To opt-out tax deferral, I recommend reaching out to our Payroll Support. This is to help you in creating payroll adjustment.

 

Here's how:

  1. Go to Help, then select QuickBooks Desktop Helpqbdthelp1.JPG
  2. In the Have a Question? window, enter tax deferral opt-out . Then hit Contact Usqbdthelp2.JPG
  3. Choose Start a chat or Get a call. qbdthelp3.JPG

When connected, inform the representative about the opt-out to assist you to create an adjustment.

 

You may also check out our Payroll news and updates page, to know more info and get links to recent and previous tax tables and forms updates.

 

Let me know how it goes and leave a reply below if you have further concerns about tax deferral. I'm always right here to help. Take care always. 

convert to online
Level 1

Covid social security deferral.

Hello,

We have Covid pay and I am using desktop payroll.  Here are my questions:
How do I set up the Covid pay?  

How is the pay taxed?

Where/how does it get reported on form 941?

What else do I need to know in order for this to be streamlined?

 

Thanks much,

Gail

BettyJaneB
QuickBooks Team

Covid social security deferral.

Welcome to the Community, @convert to online.

 

I got you covered in setting up Covid pay in QuickBooks Desktop. This way, you can identify how they were taxed and reported in the 941 form.

 

Let's start with determining your employee’s benefit and hourly rate. You'll need to verify if your employee will fall under the benefit type or hourly rate. 

 

After that, you can now start creating an expense account for the paid leave. 

 

To do that:

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

Once done, you may proceed with setting up the payroll item to track each type of paid leave found under the FFCRA that you've identified. To give you complete details about this process, depending on the type that you choose, please refer to this link:  How to track paid leave and sick time for the coronavirus.

 

Moreover, by running a payroll and using the item that you made, you'll be able to earn tax credits that are reimbursable by your agency. On the other hand, this set up will reflect on the Line 5a (i) and Line 5a (ii) on the 941 form.

 

For more details on how the system populates the form, feel free to check out this link: Learn how QuickBooks Desktop populates the lines on the Form 941.

 

Lastly, I'm adding these resources below to help shed some light regarding the tracking of the  Families First Coronavirus Response Act in QBDT:

Leave a comment below if you have any other questions. I'm a few clicks away to help. Have a good day!

convert to online
Level 1

Covid social security deferral.

Betty,

Employee will be paid under "Nat'l Paid Leave Family"  

We will be paying hourly.

What taxes is this pay exempt from?

 

Thank you,

Gail

Rasa-LilaM
QuickBooks Team

Covid social security deferral.

Thanks for coming back to the Community, convert to online.


When using the Nat'l Paid Leave Family, your employee is exempted from the following taxes.

 

  • Social Security Company
  • CARES Co. Soc. Sec. Deferral
  • CARES Retention Credit
  • EE Soc. Sec. Deferral Creditpaid leave1.png

 

Let's go to the Taxes window to view the taxes associated with the National Paid Leave FMLA. I’m here to guide you on how to get there.

 

  1. Go to the Lists menu at the top bar and choose Payroll Item List.
  2. Right-click your mouse beside National Paid Leave FMLA and select Edit Payroll Item.
  3. Click the Next button three times until you reach the Taxes window.paid leave.png
  4. Then, review all the taxes.
  5. Press Next until Finish.

 

For future reference, here’s an article that provides detailed information on how to get your tax credits: How to claim your tax credits under the Family First Coronavirus Response Act.


Additionally, this link contains resources that will guide you in preparing your tax forms in QuickBooks Desktop. It also lists all the dates when to submit them: Year-end checklist for QuickBooks Desktop Payroll.


Feel free to leave a comment below if you have any other concerns or questions. I’ll be around to answer them for you. Wishing your business continued success.

convert to online
Level 1

Covid social security deferral.

I do not have the pay "National Paid Leave FMLA" in my payroll list.  

MirriamM
Moderator

Covid social security deferral.

Thanks for getting back and keeping us updated, @convert to online.

 

To isolate the issue, let's check your payroll item list and look for National Paid Leave FMLA payroll item. 

  1. Go to the Lists menu at the top. 
  2. Choose Payroll Item List
  3. Look for National Paid Leave FMLA.

If you're unable to create, here's what you'll need to do:

  1.  Go to the Employees menu at the top.
  2. Choose Manage Payroll Items, then select New Payroll Item.
  3. Tap Custom Setup, then Next.
  4. Select Addition, then Next.
  5. Give your pay type a name, such as National Paid Leave FMLA, in the text field and select Next.
  6. Pick COVID-19 Expenses (or whatever you named the expense account) as the expense account, and then Next. 
  7. In the Tax Tracking type window, Select National Paid Leave FMLA, then Next.
  8. In the Taxes window, select Next.
  9. In the Calculate Based on Quantity window, select Neither, and then select Next.
  10. In the Default Rate and Limit window, make sure the rate is at 0 and the limit is at $10,000, select One Time Limit from the Limit Type dropdown, and select Finish. 

Once done you can follow the steps provided by my colleague @Rasa-LilaM

 

For more details about setting up National Paid Leave FMLA payroll item, see this article: How to track paid leave and sick time for the coronavirus.

 

If you have additional questions, please don't hesitate to go back to this thread. I'm here for you. Take care. 

 

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