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ATR93
Level 1

National Paid Leave Employee and 401k Contributions/Match

I set up the National Paid Leave Employee as an Addition in payroll per QB instructions.  When I go to pay employee under that, the 401k contribution/match do not automatically come out. I can't find information anywhere that says if 401k is supposed to come out of National Paid Leave.  If it is supposed to come out, how do I get it to work?

15 Comments 15
john-pero
Community Champion

National Paid Leave Employee and 401k Contributions/Match

You are correct in thinking that 401k should come out of FMLA pay. One place to look at is the setup for the 401k and what wages are subject to it.  

barbhunt07
Level 2

National Paid Leave Employee and 401k Contributions/Match

I am having the same issue.  Since QB's has the ESL & EFMLA in as an "Addition" and not a "Wage" I can't seem to link the 401k contribution or 401k match to the ESL and EFMLA items.  Has anyone figured out a work around?  Thanks!

john-pero
Community Champion

National Paid Leave Employee and 401k Contributions/Match

The issue, as I see it, that in following the setup instructions as presented by QB, the paid leave is not counted as Earnings, where it would be affected by the 401k calculations but is added as Additions/Deductions, the same classification as the retirement.

 

Your workaround until there is directive to change the leave pay to earnings (as it should be since it is 100% taxable to employees) will be to manually override during payroll check review prior to creation

barbhunt07
Level 2

National Paid Leave Employee and 401k Contributions/Match

@john-pero  I completely agree with you.   I don't understand why Intuit/QB's has not come up with a solution for this.  Tracking everything for FFCRA and PPP Loans is essential.  Thanks for your response.  

BT76
Level 2

National Paid Leave Employee and 401k Contributions/Match

So are you saying I need to change the National paid leave to a wage and not an addition?

BT76
Level 2

National Paid Leave Employee and 401k Contributions/Match

So when I went through the instructions on how to set-up the National Paid Leave, it says to set them up as "additions" not "wages". When I run payroll with it set up as "additions" it does not calculate the 401k in the payroll. I then set up a "dummy wage" as the National Paid Leave and it then calculates the 401k, my question is can I do it that way and then just manually zero out the EMPLOYER portion of the social security and medicare or is this setting something in motion that will cause a larger problem down the road? This all just seems like a big mess!

Rubielyn_J
QuickBooks Team

National Paid Leave Employee and 401k Contributions/Match

Let me provide some insights about the National paid leave in QuickBooks Desktop, @BT76.

 

You'll need to add the National paid leave as an addition, not a wage in QuickBooks. To track the National Paid Leave for Employee accordingly, you'll have to determine your employee's benefit and hourly rate. Then, set up your liability and expense accounts.

 

Once done, you can set up your payroll items, here's how:

  1. Choose the Employees menu.
  2. Select Manage Payroll Items, then choose New Payroll Item.
  3. Click Custom Setup, then choose Next.
  4. Select Addition (Employee Loan, Mileage Reimbursement), then click Next.
  5. Provide your pay type a name, such as National Paid Leave EE or National Paid Leave Family, then choose Next.
  6. In the Expense account window, select the expense account you created and then click Next. 
  7. In the Tax tracking type window, choose the paid leave type, such as National Paid Leave EE or National Paid Leave Family based on what you are setting up as the tax tracking type.
  8. In the Taxes window, click Next.
  9. Select Calculate this item based on Quantity in the Calculate Based on Quantity window, and then choose Next.
  10. In the Default Rate and Limit window, set the rate for the following items. The National Paid Leave Employee limit is $5110 and the National Paid Leave Family is $2000.
  11. Make sure that the Limit Type is Annual, restart each year, and then select Finish.

Once done setting up your payroll items, you have to set up the tax items to ensure you're tracking the tax credits. 

 

I also recommend consulting your accountant to make sure that your National Leave and FFCRA reports are accurate.

 

After you’ve run your payroll with the paid leave, you’ll get credit towards your Federal Tax deposit under the FFCRA. 

 

Let me know if you have other queries with National paid leave in QuickBooks Desktop. I'm more than happy to help. Keep safe and healthy.

BT76
Level 2

National Paid Leave Employee and 401k Contributions/Match

Thanks, I understand all of that but then how do i get my 401k to calculate off of an "addition? It does not calculate when the pay is just an addition and QB does not allow you to alter the number for 401k.

Rubielyn_J
QuickBooks Team

National Paid Leave Employee and 401k Contributions/Match

Thanks for getting back in here, @BT76.

 

National paid leave is a W2 income to the recipient and still subject to all employee taxes as well as all employer taxes/contributions except employers SS. 

 

For National Paid Leave, you'll need to create an hourly rate for them. Their hourly rate under the FFCRA needs to be equal to the commission paid over the last six months divided by their hours worked in the six months.

 

You can find more information about the specifics, regarding wages, by reviewing the COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs article from the IRS.

 

For additional reference about these actions, check out this article: How to track paid leave and sick time for the coronavirus.

 

Know that the Community is open 24/7 to help you. Have a pleasant day.

Jakal
Level 2

National Paid Leave Employee and 401k Contributions/Match

Rubilynn, you seem to have Intuit's innate ability to answer a question that is not being asked. The issue at hand for this entire thread is that adding the NPL and NPLF per the quickbooks instructions does not include those amounts when it then calculates the employees 401k deferral and corresponding company match, yet those amounts are considered income for that calculation. No one said anything about commission in the thread that I can see. The issue is QB set-up fails when it comes to including that addition in the calculation of 401k deferral and 401k company match. Do you have a solution to that problem?

RCV
QuickBooks Team
QuickBooks Team

National Paid Leave Employee and 401k Contributions/Match

Thanks for checking in with us, Jakal.

 

We'll need to add the National paid leave as an addition, not a wage in QuickBooks Desktop. To track the National Paid Leave for Employee accordingly, you'll have to determine your employee's benefit and hourly rate. Just in case you already performed the steps provided by my colleague and john-pero, then the same thing happens (where QuickBooks not including the calculation of 401k deferral and 401k company match as an addition), then let's try opening another company file. This helps us check if you're having a problem with only one file and not the program itself. Let me show you how:

  1. In your QuickBooks, go to the File menu at the top left.
  2. Choose Close Company.
  3. In the No Company Open window, click the drop-down arrow in the Open a sample file icon.
  4. Choose a sample file and click on it.

 

If the problem persists, there may be a damaged data on the company file you've been working with. We can run the Rebuild Data tool is built-in to fix any company file data issues. Just follow the steps and detail in the Fix data damage on your QuickBooks Desktop company file article. We can also repair your QuickBooks Desktop to fix any damaged components in the software. 

 

You can also contact our Technical Support Team. They'll pull up your account in a secure environment and help you with this one. You may send a message via chat, call us at a time convenient to you, or we’ll get in touch with you instead. To ensure we address your concern, our representatives are available from 6:00 AM to 6:00 PM on weekdays and 6:00 AM - 3:00 PM on Saturdays, PST. See our support hours and types for more details about this one.

 

Visit our QuickBooks Help Articles page for more insight s about managing your business in your software.

 

Feel free to update us after contacting our support or performing the solutions, as I want to ensure this is resolved for you. Please reply to this post and I'll get back to you. You have a good one. 

Jakal
Level 2

National Paid Leave Employee and 401k Contributions/Match

Again, you answer posts with canned answers that do not address the issue. I have had the paid leave set up for months per QB instructions. As I am preparing for our 401k audit, I realized that all of the amounts paid out following the instructions from QB have not been INCLUDED IN COMPENSATION FOR CALCULATION OF 401K DEFERRAL AND COMPANY MATCH. That is the issue and not how to properly set up the accounts and run payroll to track it. 

There was one post by Janet1 that indicated that if you put the 401k data below the national paid leave data in the employee payroll info then it will be included in the calculation. I am in the process of testing that right now. If that is true, that is the solution to the problem so many people are trying to fix and QB should take note and create a canned answer for that so when that question gets asked, that question gets answered.

Intuit has such a difficult time parsing a question in order to answer it, I think they must be using some type of not so intelligent AI that identifies a few key words in the post and auto responds with a canned answer.

Charies_M
Moderator

National Paid Leave Employee and 401k Contributions/Match

I appreciate the additional clarifications, Sergio65.

 

The steps shared above were the basic solutions to fix the issue with 401k deferral and company match not being included in the compensation. Since you've tried the possible solutions above to no avail, it would be best to reach out to our QuickBooks Care Support. They have the tools to conduct a thorough investigation for a complete resolution.

 

Here are the steps to contact support:

 

  1. Click Help at the top menu and select QuickBooks Desktop Help.
  2. In the Have a Question? window, enter a topic.
  3. Click Contact us.
  4. Hit the Stat Messaging button.
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Our operating hours for chat support depend on the version of QuickBooks that you're using. Please see this article for more details: Support hours and types.

 

Keep me posted for additional questions or other concerns. I'd be more than happy to help. Wishing you the best of luck.

Jakal
Level 2

National Paid Leave Employee and 401k Contributions/Match

I have verified this solution works, put the 401k data below the national paid leave data in the employee payroll info then it will be included in the calculation. 

Fairly simple solution, hopefully Intuit takes note and provides this solution to all those seeking.

AMG3313
Level 1

National Paid Leave Employee and 401k Contributions/Match

Jakal,

 

Kudos to you for figuring this out!!!!  We are very thankful for your reply as we have found no other responses from Intuit that actually addressed the issue at hand!  Thanks a million!  It worked for us as well.  

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