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Easyas12
Level 3

National Family Paid leave credit

Can someone please explain how to get the credit against company medicare tax for paid leave.

 

After confirming I had the correct payroll items -- I was told by Quickbook support to do the following--

 

"We need to do to the Liability Window to then open the liability check.

Next we need to add another line item there called  National Family Paid leave credit so you can offset the amount.

 

We should not offset it to the paycheck itself because it would result to positive and negative amounts on the expense report."

 

Any thoughts on these entries?

46 Comments 46
john-pero
Community Champion

National Family Paid leave credit

In plain English what support means is, when you are creating your 941 liability payment you will edit it before printing or paying by adding a line to the detail portion that is the negative amount equal to your employer share of Medicare tax due and that line item is called NFPL Credit.

 

If your ducks are all in a row and the credit for eligible paid wages has properly created a credit that already offsets your liability it may not include the Medicare credit and this is how you accomplish that.

 

It may well be that you do not even owe anything before counting medicare credit and may be due a refund, there is a form for that 

 

 

Easyas12
Level 3

National Family Paid leave credit

I was told that the following KB regarding Paid leave--

https://quickbooks.intuit.com/learn-support/en-us/set-up-payroll/how-to-track-paid-leave-and-sick-ti...

 

Was incorrect regarding the medicare credit.

 

Can someone explain how they use National Paid Leave Medicare Credit?

On the check?

On the 941?

How does it show up on your Covid-19 expense account?

MaryJoyD
QuickBooks Team

National Family Paid leave credit

Let me share some information on how to track your National Paid Leave Medicare Credit, @Easyas12.

 

To track the National Paid Leave Medicare Credit on the check, Form 941 and your Covid-19 expense account, you’ll just have to follow the steps provided on the article that you’ve provided. 

 

That’ll make sure that your employees got the money they needed and comply with the Family First Coronavirus Response Act (FFCRA).

You’ll just have to set up your expense accounts for the paid leave from the Chart of Accounts and then set up your liability and expense accounts. 

 

You can refer to Step 2 and Step 3 on the article that you’ve shared on how to track paid leave and sick time for the coronavirus

 

Let me know if there’s anything that you need. Have a wonderful day!

Easyas12
Level 3

National Family Paid leave credit

I was told by payroll support NOT to use the credit on a check-- just the 941.  Is this right?

AlexV
QuickBooks Team

National Family Paid leave credit

Hi, Easyas12.

 

Thanks for getting back to us. You'll want to follow the detailed steps in these articles and for more details.

Post again if you have other concerns. Stay safe!

KarenMcl
Level 2

National Family Paid leave credit

If I understand it - you use a different credit for the Medicare and Social Security deferral - it is in the Desktop Payroll items  as a tax credit called Cares Social Security Co Deferral. You DO use this on the 941 check to reduce to amount of tax to be paid - or else you'd pay too much. This Deferred SS tax has to be repaid.  There are lines on the 941 Report to record the different credits you have taken.  This is for time off to care for someone who has the virus, or children, etc. at home during quarantine due to schools closed.

 

For pay to employees that have the virus, or have to self-quarantine that is the National Paid Family Leave and here is a credit in the payroll items for this as well. This is up to 80 hours FFRCA and 100% of those wages can be deducted by:  Using the Tax credit as a line on your payment for 941 taxes, recording the wages taken as credit on the 941 Report - AND posting this activity to an Account you have set up for COVID leave tracking.  In the Payroll Item list - edit the 3 new Items to be sure the Expense account is the one you have created for FFRCA tracking.

amandamromine
Level 1

National Family Paid leave credit

Was your Q2 941 correct? Mine was woefully incorrect. I cannot get a straight answer from QB support about the treatement of pre-tax health insurance premiums. When I run payroll for an individual receiving paid sick leave, the pre-tax insurance is deducted, and taxes are calculated correctly. When I preview the 941 for Q3, the pre-tax insurance premium is not included correctly. Curious if you have dug into that any. 

Ghicks2417
Level 1

National Family Paid leave credit

I am having issues with:  "If your ducks are all in a row and the credit for eligible paid wages has properly created a credit that already offsets your liability..."

 

When I create my 941 check in "Pay Liabilities" in the Payroll Center, I am seeing the total taxes due.  I manually then have to enter the National Paid Leave wages, health insurance premium, and medicare tax credit for the wages, as a negative.  I saw this on instructions somewhere in all of the articles I have read.  

 

Currently, when I run a P&L, the health insurance premium and medicare tax credit are showing as a negative amount in the COVID-19 expense account.  When I paid the employee for the National Paid Leave, I included the National Paid Leave Health Insurance Premium as well as the National Paid Leave-Medicare Credit on the "Other Payroll Items" section.  I have seen some articles that say to do this, and some not to.  

 

Everything seems to be flowing to the Form 941.  My P&L is not correct.  Also, I am not sure if entering the manual adjustment before I pay the 941 deposits is correct.  I would appreciate someone helping.  

CMM72
Level 1

National Family Paid leave credit

I followed the articles in setting up all the items related to paying the COVID related credit for the employee wage and the related employer Medicare portion. When I run the report from the article to show me how much to enter as a credit when I create my federal tax deposit it shows the gross wages correctly but also a positive AND a negative for the Medicare portion, causing the report total to only give me the gross wages amount. Did I miss a step somewhere causing the Medicare to be figured incorrectly so both sides end up in the COVID-19 expense account?

 

Screenshot 2020-10-14 140150.png

LieraMarie_A
QuickBooks Team

National Family Paid leave credit

Hi there, @CMM72!

 

The total amount column in your quick report should reflect your credit that you need to enter on your liability check. To make sure you've set up the tax tracking type correctly, let me walk you through how.

 

  1. Go to Lists, then Payroll Item List.
    Capture.JPG
  2. Double-clicked the national paid leave "National Paid Leave Medicare Credit" item, then Next. Expense account should be your "COVID expense" account.
  3. Then, Next. In the Tax tracking type drop-down, choose National Paid Leave- Medicare.
  4. Hit Next until Finish. Do steps 1 to 3 for your "National Paid Leave Health Insr Premium" and make sure to click  National Paid Leave- Health as the Tax tracking type.

Once verified, go back to your quick report and check the total amount of your COVID expense account. Here's how.

 

  1. Go to your Chart of Accounts.
  2. Right-click the COVID-19 Expenses account, then select QuickReport.
    Capture.JPG
  3. Select Customize Report. In the Columns box, type in Qty then select it.
  4. Select OK. This will show you the quantity (hours) on the items used.
  5. Update the dates to reflect the paycheck date you are looking for. The amount should show all the payroll items you’ve set up and run the payroll on. The amount in the Total column reflects the amount of the Credit you can enter on the Liability check.

 

Once you’ve figured out how much you owe, you can now ensure that you’ve created a check to pay the tax liabilities. 

 

Let me know if you need any further assistance. The Community is always here to help.

Easyas12
Level 3

National Family Paid leave credit

I still not sure I understand -- my Covid expense account looks like CMM72!.

 

Is that right?

Also, the answer seems to have been edited.  Yes?

 

In an email it shows the answer starts with--

 

"The positive and negative for the Medicare portion is the company paid and employee deduction amount, respectively. The report only itemizes how the COVID-19 is used."

 

I no longer see this portion of the reply.  Is that not accurate?

 

If it is please explain further--

 

 

Easyas12
Level 3

National Family Paid leave credit

My setup is the same as yours -- Just doesn't seem right.

JonpriL
Moderator

National Family Paid leave credit

Hello @Easyas12,

 

Since you still have an issue with the payroll item and how it reflects in your liability check, I'd recommend contacting again our Customer Care Support.

 

From there, one of your live specialists can pull your account, securely, do a screen share session, and explain how your report should look like. To do so:

  1. Go to Help.
  2. Select QuickBooks Desktop Help.
  3. Click Contact Us.
  4. Enter a short description in the Tell us more about your question: field.
  5. Select Search.
  6. Click Start a Message.

Additionally, you can also consider reading through the steps outlined in this helpful article for the steps about customizing a report for all your payroll entries: Payroll and Employee Reports in QuickBooks Desktop.

 

If you have any other questions, please let me know in the comments or you can start a new thread. Stay safe!

VolLRB
Level 2

National Family Paid leave credit

I finally found a way to get it to work for me and my P&L looks correct. In the setup for the payroll tax item, National Paid Leave-Medicare, when choosing the accounts to use, I used my standard account I have Medicare taxes going to (in my case, it was Payroll Taxes expenses) as the liability account and Covid-19 Expense as my expense account. This is, in effect, reduced my payroll tax expenses by the amount of the Medicare credit.

Then, when issuing the payroll tax liability check to the US Treasury, I added a line to the payroll tax items with a negative number with the sick leave wages amount using the item National Paid Leave Credit and an another line using National Paid Leave-Medicare with the Medicare credit amount.

 

The important key to all of this was THIS: I didn't use the chart of accounts quick report at all to get my totals.  I ran a 941 report for the quarter in question. QuickBooks has added the Worksheet 1 to the end of the 941 Form. Using that worksheet, I got the National Paid Leave Credit amount from line 2a. I got the National Paid Leave-Medicare amount from line 2c. 

 

Each time I need to make the payment, I am going to the Payroll Item List and running a Quick Report on the National Paid Leave items to see how much I have already taken against that quarter's 941.

 

This is the only way I have been able, so far, to get the numbers to look right and to get my trial balance totals to look right.

sdwombat
Level 1

National Family Paid leave credit

Your solution worked for me! Thank you for posting. Like many others, I have spent literally hours on this. Fortunately for my company, we didn't end up with any National Paid Leave until the 4th Quarter, allowing many of the "bugs" to be ironed out.

myalisa1
Level 2

National Family Paid leave credit

Following your instructions to the letter left an overpayment of tax on my 941 quarterly report generated by QB desktop totaling the amount of National Paid Leave Health Ins Credit plus the National Paid Leave Medicare credit.   Like detailed throughout this string of questions the COVID-19 expense account adds and then deducts these two credits thus cancelling them out of the total amount of credit an employer can take from his/her tax deposit.  This is the issue.  How do we correct this so the total amount in the COVID-19 expense account will include not only the amount of the National Sick Pay Wage but also the NPL health ins credit and the company portion of the NPL Medicare credit?  

Thank You!

myalisa1
Level 2

National Family Paid leave credit

Following your instructions to the letter left an overpayment of tax on my 941 quarterly report generated by QB desktop totaling the amount of National Paid Leave Health Ins Credit plus the National Paid Leave Medicare credit.   Like detailed throughout this string of questions the COVID-19 expense account adds and then deducts these two credits thus cancelling them out of the total amount of credit an employer can take from his/her tax deposit.  This is the issue.  How do we correct this so the total amount in the COVID-19 expense account will include not only the amount of the National Sick Pay Wage but also the NPL health ins credit and the company portion of the NPL Medicare credit?  

Thank You!

MaryJoyD
QuickBooks Team

National Family Paid leave credit

Thank you for getting back to us and letting us know the situation, @myalisa1.

 

Please take note that when you enter the National Paid Leave Credit, National Paid Leave - Health Premium, and the amount of the 941 tax liabilities, you’ll need to enter the amount of the credit as a negative amount.

 

You can check this article for more information on how to how to claim my tax credits under the Family First Coronavirus Response Act

 

In case you're still having an error about this, I suggest reaching out to our Customer Support to further assist you in resolving this. They can get into your account in a secure environment and help you resolve it. 

 

You can follow the steps below on how to reach them:

  1. From your QuickBooks Desktop account, click the Help menu at the top.  
  2. Click the QuickBooks Desktop help 
  3. Provide some information about this concern on the search box.
  4. Click the Contact Us link at the bottom of the window. 
  5. You'll now be provided a few support options.  
  6. Select Get a call to arrange a callback from a support agent. Or Start a chat to chat with them directly.  

Here's the contact the QuickBooks Desktop Customer Support Team article for more information about this.

 

If you require any further information about your account, let me know in the Reply section below. Have a wonderful day!

erias
Level 1

National Family Paid leave credit

This entire thing is confusing. I have added the Additions for FFCRA Employee and Family, the Company Contribution for Medicare Tax Credit and the Other Tax or the FFCRA Tax Credit. I've tried various configurations for the Liability and Expense accounts since that seems to differ depending on article or video.

 

When I go to pay an employee, I tracked his hours but entered the FFCRA amount under Other Payroll Items using the Addition. For example, if the employee maxed out 4 days, he receives $800 under FFCRA Family. I also added the Medicare calculated based on 1.45%, so $11.60. This seems to get the employee paid, but then nothing after seems right. I don't see the tax credit when I click on View/Pay for the Federal 941 payment. And when I go to generate a 941 I don't see lines 5a(i) or 5a(ii) filled out.

 

So what are other folks doing?

- Are you paying employees by using Other Payroll Items and entered the Employee or Family additions?

- Are you manually entering the Medicare Credit in Other Payroll Items?

- Should the 941 5a(i) and 5a(ii) lines have the values from the Other Payroll Items you entered?

- Should the View/Pay for the 941 payment show the tax credit?

- How does the Other Tax Tax Credit come into play?

 

Thanks for any help.

MaryJoyD
QuickBooks Team

National Family Paid leave credit

I can share some insights about these payroll and tax items, @erias.

 

You can pay your employees paid leave if they’ve been affected by COVID-19. You’ll just have to identify what pay leave type they fall under and their hourly rate. From here, you’ll just have to set up your expense accounts and payroll items for the paid leave. Then, ensure to set up a new tax item to track the tax credits. 

 

Also, you’ll have to make sure to use the correct expense accounts and payroll or tax items for accurate reporting of your Medicare credit. For more insights, please refer to this article: How to track paid leave and sick time for the coronavirus.

 

The Qualified Sick Leave Wages are the sum of the new wage types with the National Paid Sick Leave - EMP and National Sick Leave- Family. This Qualified Sick Leave Wages are subject only to the employee portion of Social Security.

 

Here’s how to check the Line 5a (i):

  1. Go to the Reports menu and choose Employees and Payroll, then Payroll Summary.
  2. Next to Dates select a quarter.
  3. In Show Columns, select Total only.
  4. Scroll to the bottom and locate National Paid Leave-Employee item.

For the 5a (ii):

  1. Go back to the Reports menu at the top of the page.
  2. Choose Employees and Payroll and then Payroll Summary.
  3. Next to Dates select a quarter.
  4. In Show Columns, select Total only.
  5. Scroll to the bottom and locate National Paid Leave-Family item.

Check this article for more information: How QuickBooks Populates The 941.

 

For more information about the amount of the 941 tax liabilities and other tax credits, I suggest checking this article: How to claim my tax credits under the Family First Coronavirus Response Act.

 

Let me know if you still have questions with your tax liabilities and credits. I'm always here to help. Have a wonderful day!

erias
Level 1

National Family Paid leave credit

Thanks. I believe I have followed the guidance on the page to setup the accounts but it never looks right and there are differing opinions elsewhere.

 

The guidance posted in comments like yours is always high level and not specific. Can you answer my questions below?

 

- Are you paying employees by using Other Payroll Items and entered the Employee or Family additions?

- Are you manually entering the Medicare Credit in Other Payroll Items?

- Should the 941 5a(i) and 5a(ii) lines have the values from the Other Payroll Items you entered?

- Should the 941 5a(i) and 5a(ii) be auto populated? I see the numbers in the reports but do not see it in the 941.

- Should the View/Pay for the 941 payment show the tax credit?

- How does the Other Tax Tax Credit come into play?

MaryAnn_E
QuickBooks Team

National Family Paid leave credit

Hi there, @ erias.

 

I completely understand how confusing times like this may feel. Don't worry, you came to the right place to get some answers. 

 

QuickBooks uses payroll items to track individual amounts on a paycheck and accumulate year-to-date (YTD) wage and tax amounts for each employee. There are payroll items for compensation, taxes, other additions and deductions, and company-paid expenses. You can assign these payroll items to different accounts as needed.

 

You’ll need to set up tax items to ensure you’re tracking the tax credits. If you want the payroll item to calculate based only on the Earnings of the employee, it should be the first item in the Other Payroll Items section of the paycheck. If you want to include certain additions and deductions in the computation, add the payroll item after those items.

 

The Line 5a(i): Qualified Sick Leave Wages and Line 5a(ii): Qualified Family Leave Wages. Employers are required to provide these, when applicable, under the FFCRA. QuickBooks supplies Column 1 from the wage base for Social Security minus the wage base tips. Column 2 is a calculated amount.

 

 Also, you can read through these articles to learn more about how QuickBooks populates the lines on Form 941:

 

 The amount will automatically show up in the Pay Liabilities section. Then, you can now proceed to create the liability check to pay your fee. Just select the 941 taxes and click View/Pay

 

The other tax credit populates when On the Other tax window, select National Paid Leave Credit, and then Next. On the Other tax window, select User-Defined Tax from the Other tax dropdownand then select Tax is paid by the company.

 

 As you continue working with QuickBooks, you can as well open the topics from our help articles in case you need related resources in the future.

 

If there's anything you need assistance with, let me know by adding a comment below. It's my pleasure to help. Keep safe!

erias
Level 1

National Family Paid leave credit

Hello, your response still is a bit high level and vague. If you follow the instructions to set up the Payroll Items, how do you actually use them? If you have an employee eligible for $800 in FFCRA Family coverage, can you show an example of where it goes on the Payroll page? 

 

I don't need general guidance on Tax items, etc. I need specific guidance on how to use the FFCRA items that were described to setup so that I can run payroll, capture the credits, and issue the payment correctly.

 

The general guidance about the 941 doesn't help. Should QuickBooks automatically be setting 5ai and 5aii? Because for me it is not.

Pabz_L
QuickBooks Team

National Family Paid leave credit

Allow me to share some information when creating payroll using FFCRA, @erias.

 

 If you’re using QuickBooks Desktop Payroll Assisted, creating payroll using FFCRA paid leave, and send payroll to Intuit, a payroll liability check automatically post to your check register. This liability check will automatically include your tax credit. No further action from you is needed.

 

Here’s an article that will guide you if you’re using other types of payroll: Claim tax credits under FFCRA.

 

 

Also, if your employee was affected by COVID-19, you can use these articles to learn how to pay your employees paid leave to ensure your employees have the money they need and you comply with the FFCRA:

 

 

Let me know if you need any further assistance. The Community is always here to help.

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