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TME1104
Level 2

FFRCA and 941 credits

Hello, 

 

I use QB Desktop.  I am trying to complete my 941.  We had COVID sick wages and associated health care costs on those wages.  We paid our taxes weekly like normal for the entire quarter and now have credits that we will use toward future payments.  My problem is that I cannot get QB, when completing the 941, to let me use the health care costs associated with the sick pay wages.  When completing the "941 interview - credit for sick leave and family wages" it seems to want Line A to be the total of Line B and C.  I guess my questions is how to complete that section of the interview?  My sick pay wages were $18561.20 and associated health care costs were $4737.44.  I do not have any Family Leave Wages - Line C.  If I put the total of both on Line A and then the sick pay wages on line B, it is not happy.  Any help would be greatly appreciated.  

 

Thank you!

Solved
Best answer November 11, 2020

Best Answers
Pabz_L
QuickBooks Team

FFRCA and 941 credits

Hello there, @TME1104.

 

Yes, you’ll have to set up a liability account to track the eligible wages to use towards the tax credit.

 

Here’s how:

 

  1. In your QuickBooks Desktop, click the Lists tab and select Chart of Accounts.
  2. Click the Account drop-down box at the bottom of the list and choose New.
  3. Choose Other Account Type. Then, click the drop-down arrow and choose either a short-term loan (less than one year) or a long-term loan (longer than one year).
  4. Click Continue and enter the account name and number.
  5. Leave the account balance at $0.00.
  6. When you are finished click Save & Close to finish setting up your liability account.

 

Once done with the whole process, you can review your payroll reports to ensure you’ve been tracking the leave correctly.

 

The Community is always here if you need anything else. Have a good day!

View solution in original post

13 Comments 13
FritzF
Moderator

FFRCA and 941 credits

Thanks for visiting the Community, @TME1104.

 

When preparing form 941 in QuickBooks Desktop (QBDT), the amount the should enter the in the lines 5a (i) and 5a (ii) are taxable social security and qualified sick leave wages. Taxable social tips for line 5b and taxable medicare wage & tips for 5c. This will help you complete the process.

 

For more information, consider checking out this article: How QuickBooks Populates The 941.

 

Just in case, I'll add this article for future reference: How to claim my tax credits under the Family First Coronavirus Response Act.

 

Please know that I'm only a post away if you have any other questions or issues. I'll be here to assist. Have a great day!

TME1104
Level 2

FFRCA and 941 credits

Thanks for replying FritzF!

 

The only new payroll item I created was a FFRCA sick pay item which I used for our sick pay wages.  (I did not see all the articles on set up until now).  I did not create a new item for the health care costs associated with the sick pay wages - I just calculated them manually.  Which brings me to the 941.  I completed the Worksheet 1 that the IRS has provided and I am trying to enter those numbers onto my 941 but QB won't let me override line 13C on my 941.  The number that QB is putting on line 13C is correct if I didn't have health care costs on our sick pay.  Hence, my questions on how to complete the "941 interview" that comes up when you are completing the 941 in QB.  Any help on where I should go from here would be greatly appreciated.  

 

Thank you in advance!

katherinejoyceO
QuickBooks Team

FFRCA and 941 credits

Thanks for coming back for more assistance, @TME1104. I understand the need to complete the 941 interview in QuickBooks Desktop Payroll. 

 

To add a bit of information, the tax form 941 will populate its data automatically based on the paychecks you've entered in the system. Hence, there isn't a need for you to override or manually fill it in.

 

Since you've already created FFRCA sick pay item for sick pay wages, let's ensure you're paying only the employee portion of Social Security, and you're not set to pay the Employer Portion of Social Security fo this pay item. Here's how:

 

  1. Go the Employee menu, then scroll down to Manage payroll items.
  2. Edit/view payroll items, then select one of the National Paid Leave items you set up.
  3. Click Next until you come to the taxability screen. 
  4. Select the default button and set your taxability to unmark Employer Social Security.
  5. Repeat for all National Paid Leave additions you set up.

 

Additionally, determine what pay leave type your employees fall under and their hourly rate before paying them. 

 

For more insights about the benefit type, read through this article: How to track paid leave and sick time for the coronavirus. It has a thorough guide about paying your employees paid leaves when they're affected by COVID-19.

 

Just in case you'll need to go over the employees' paycheck to make changes on the payroll item, refer to this help article: Edit payroll items used on paychecks.

 

You'll also want to check out the resolution shared by McKenzieBieker related to this concern in this thread: Worksheet 1 for Form 941

 

Feel free to message again if you have additional concerns. We're always delighted to help you some more. 

TME1104
Level 2

FFRCA and 941 credits

Thank you so much for your help and yes I agree, normally I do not have a need to override my 941 data. :)  I will read and try all you have provided me with and I will let you know how it goes.

 

Thanks again for all your help!

Nick_M
QuickBooks Team

FFRCA and 941 credits

Hi TME1104. 

 

Thanks for stopping by the Community! I'm glad my colleague was able to assist you. If you ever need further assistance or guidance, feel free to post here anytime.

 

Have a lovely afternoon. 

TME1104
Level 2

FFRCA and 941 credits

I wanted to ask a questions regarding the article "How to track paid leave and sick time for the coronavirus".

On Step 3 it says - 

Step 3: Set up payroll items

Once you set up your liability and expense accounts, you need to set up payroll items to track each type of paid leave found under the FFCRA that you identified in step 1.

 

It says "once you set up your liability and expenses accounts..." however, there are no instructions on setting up any liability accounts.  Am I only setting up the new expense account called - Covid 19 Expenses (or something similar) or am I suppose to be setting up a new liability account as well?

 

Thank you for any help!

Pabz_L
QuickBooks Team

FFRCA and 941 credits

Hello there, @TME1104.

 

Yes, you’ll have to set up a liability account to track the eligible wages to use towards the tax credit.

 

Here’s how:

 

  1. In your QuickBooks Desktop, click the Lists tab and select Chart of Accounts.
  2. Click the Account drop-down box at the bottom of the list and choose New.
  3. Choose Other Account Type. Then, click the drop-down arrow and choose either a short-term loan (less than one year) or a long-term loan (longer than one year).
  4. Click Continue and enter the account name and number.
  5. Leave the account balance at $0.00.
  6. When you are finished click Save & Close to finish setting up your liability account.

 

Once done with the whole process, you can review your payroll reports to ensure you’ve been tracking the leave correctly.

 

The Community is always here if you need anything else. Have a good day!

View solution in original post

TME1104
Level 2

FFRCA and 941 credits

Ok  thanks.

TME1104
Level 2

FFRCA and 941 credits

Ok, thank you.  I have created a liability account called COVID 19.  Can I ask another question please?  In step 4 of "How to track paid leave and sick time for the coronavirus"  where you are setting up a "other tax" payroll item -  on step 6, in the "Agency for company paid liability" window are we directing both the liability and expense accounts to our newly created other expense account like in the other steps?  (Where we are going to get the pop up that warns us we are directing both to the same account) Or do we direct the liability account to the newly created liability account?

 

Thank you!

Tori B
QuickBooks Team

FFRCA and 941 credits

Hey there, @TME1104.

 

Thanks for following up with us. I'm happy to provide some insight into the liability and expense accounts. 

 

You're correct with your thinking. When setting this up, you'll want to direct the liability account to the newly created liability account. You'll also need to do the same for the expense account (direct it to the newly created expense account). 

 

Additionally, it's also a great idea to run this by your accountant for further clarification. Your accountant will know what's best for you and your business. If you don't have an accountant, don't sweat. You can find one here in our Resource Center

 

Please keep me posted if you have any other concerns about this process. I want to make sure everything is taken care of for you. You can reach out to the Community at any time. Take care and have a great weekend! 

TME1104
Level 2

FFRCA and 941 credits

Thank you so much!

TME1104
Level 2

FFRCA and 941 credits

Hello, me again.  :)  

 

Thank you all for all your help thus far.  However, I have another question.  I am processing my 941 for 1st quarter 2021 where I had COVID sick pay wages.  (creating the paychecks works perfectly btw) On the worksheet 1 portion of the 941 it is giving me a credit that totals my sick pay wages and my employer share of Medicare. We have to make weekly federal deposits which I have been doing.  On the 941 with the credit calculations from worksheet 1 I have a credit on my 941 where I have overpaid which I am just applying to next quarter.  My questions is this - how do I get this same credit to be reflected in QB's.  It seems like if I were to make liability adjustments that total the credits from worksheet 1, that it would be in balance with the 941.  Does that seem like it is what should be happening or have I got something set up incorrectly?

 

Thank you so much for any help.

GlinetteC
Moderator

FFRCA and 941 credits

Thanks for getting back to us, TME1104.

 

You'll have to make sure you've set up your employees under the Family First Coronavirus Response Act correctly. Please refer to this article for the detailed guide: How to track paid leave and sick time for the coronavirus.

 

You can also read this link on what you need to know about the Coronavirus Response Act to learn more information on how you can help employees with paid leave.

 

You may also consider reaching out to our Payroll Support Team. That way, they'll be able to provide you with details about the credit and can do a screen-share with you to further assist with this concern.

 

Please get back to this thread if you need anything else.

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