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Level 3

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

 
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Level 2

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

i asked a few days ago - seems like a new payroll next table will get pushed out - but when is the question 

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QuickBooks Team

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

Hi lsefcik. Changes are coming daily to QuickBooks Online Payroll, Intuit Online Payroll and QuickBooks Desktop Payroll. Thank you for your patience as we work to support you.

 

The Families First Coronavirus Response Act goes into effect with leave taken April 1, 2020 and after. Our payroll teams here at Intuit are working quickly to create the appropriate pay types so that you can track and report hours towards this tax credit for your small businesses.

 

Per the Act, if an employee was impacted and took time off for COVID-19 related issues prior to April 1, 2020, the time would be tracked as regular sick hours and is not eligible for any tax credits at this time.

 

We will be providing more updates as they become available. If you have any other questions or concerns, feel free to reach out here. 

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Level 3

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

Thank you but that wasn't the question.  The CARES act allows for deferral of the Employer's SS tax (941 payments ), with the amount deferred not actually due to be paid until 12/31/21 and 12/31/22.  That means QB will need to know if an employer wants to defer their SS taxes (employer only) or not and prepare the 941 and send (or not send ) the 941 payments to the IRS accordingly.  It's my understanding the deferral option is immediate, so it seems like QB needs to be contracting every employer that uses QB payroll to ask if they want to defer SStax payments (6.2%) or not.  How does QB propose to handle that?

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Level 3

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

It won't be a new tax table. The deferred tax must still be calculated and documented somewhere, even if it isn't getting paid to the IRS.  My guess is that the 941 will look the same, but the electronic deposits will need to be altered just to include the medicare portion of the tax if an Employer wishes to defer.

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Level 2

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

right that makes sense - it would almost have to be an option on each payroll since some companies might not want to make the deferment now - but a month from now change their minds. 

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Level 3

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

what is the plan to handle the Employer Retention Credit part of the CARES act? This is where the employer can get a 50% credit off their payroll taxes, up to 5k per employee for wages paid (including health insurance) for those who have experienced a decrease in revenue. The tax deposits immediately can be reduced by 50% and the 941 has to be adjusted accordingly to show the employer is taking the credit. I know QB already implemented the FFCRA which factors in the sick paid leave credits (up to $5110 per person), but this one is a bit more complicated, because not everyone will be taking it or qualify. For now I plan to calculate my credit after running payroll and reduce my tax payment accordingly, but QB has to find a way to track this and ask every payroll if you want to take the credit and then adjust 941 accordingly! 

 

Here is the IRS link with details: https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

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QuickBooks Team

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

Hello, @khani99.

 

 I appreciate the details you've shared about managing  Families First Coronavirus Response Act related-payroll. Currently, our payroll team are working quickly to create the appropriate pay types so that you can track and report hours towards this tax credit for your small businesses. As per the Act, if an employee was impacted and took time off for COVID-19 related issues prior to April 1, 2020, the time would be tracked as regular sick hours and is not eligible for any tax credits at this time. 

 

Here's how to add a pay item:

  1. Go to the Workers menu.
  2. Choose the Employees' tab.
  3. Double-click on the name of the employee.
  4. Pick the Pencil Icon beside Pay.
  5. Scroll down to the How much do you pay (employee's name)? section, then click the Pencil Icon.
  6. Select Add additional pay types.

You can read through this article for more detailed steps: Pay employees under the Family First Coronavirus Response Act

 

Just a heads-up, some state agencies may have announced the new Tax year 2020 tax filing and payment guidance due to the Coronavirus Pandemic. You can visit our compliance page to check for specific announcements from their State Tax agency: Payroll Tax Compliance Links.

 

Swing by here if you have other questions.

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Level 3

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

Dear IamjuViel,

Once again, you have missed the question. We are NOT asking about how to report hours! We are asking about the deferral of the 941 tax payments!!! QB is electronically making 941 payments at the end of each payroll (if not on full service, you do have to schedule the payment), but we are asking how QB will handle those that want to, or are qualified to defer 941 taxes and those that do not. Please do not answer this question with an answer that relates to tracking hours or pay types.  Please do not reference the act or IRS regs.  We know what those say.  We are asking how QB will handle whether to defer 941 payments or not!

 

Thank you for reading the question, understanding the question and providing a suitable answer.

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Moderator

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

Hello again, @lsefcik. I appreciate your input from every angle.

 

After running payroll, when tax payment submitted automatically, you'll have to contact our Payroll Support to delay the payments or cancel the submission. One of them will need to take over and assist you with the data you need.

 

To contact them, here's how:

  1. Sign in to your QuickBooks Online company file.
  2. Go the Help icon to choose Contact Us.
  3. Type the issue/topic under the What can we help you with section and then hit the Let’s talk button.
  4. Scroll down to select on how you'd want to connect to the support and then enter your contact information.

I want to make sure everything is taken care of for you, so if you have any other issues, leave a comment below. I'm always here to help. Have a good one!

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Level 1

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

It seems extremely inefficient for QB Payroll Customers who want to defer employer FICA to have to submit full payroll and then call Customer Suppport.   As a customer I would hope QB could quickly design a form that can help us do that.  

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Level 1

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

I'll say it's inefficient! Talk about a time waster for those of us that have several clients. Bummer.

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Level 1

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

This will never work for thousands of Payroll users.  It is imperative that you quickly come up with a solution each user can use within the program. Your answers lead one to believe you still do not know what the real question is.

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Level 2

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

QB Tech Support didnt understand the question asked about 941 ER SS tax deferral and then provided a very time-consuming "solution".  If you are frustrated with the response and cant wait for QB Tech Support to catch up because you have already run payroll and need to submit the tax payment,  I suggest using the steps below and go "old school".  

 

Create your own payment using the Create Custom Liability Payments under Employees / Payroll Taxes and Liabilities then check the items: Federal Withholding, Medicare Company, Medicare Employee, Social Security Employee (not Social Security Company) and create the check for your check register.  Then Log directly into your EFTPS account via the internet instead of using the QB Pay Liabilities tab that groups all these individual Payroll Items together.

 

 This is how you used to create payroll liab payments before QB added the direct link to EFTPS in the program.  The 941 Report will show the shortage of payment on the report.  Lets hope QB gets it together and has a way to track these tax deferral of payment funds quickly so that it shows correctly on the P&L.  Hope this helps.

 

 

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Level 2

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

They have absolutely no plan whatsoever.

 

I had this from them just now.

 

"

I highly suggest to contact the bank to stop these tax payment. And you must pay it manually directly to the tax agency on the date based on the government approved extension date which on July.. Since its not really usual to have a tax payment extension. Quickbooks dont have options to really change or modify tax filing. 

"

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Level 1

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

boxarpress - I did this exact thing but went back in and "PAID" another check to a Vendor called "Employee Retention Credit" in order to have a quick way to track how much I was holding back and to stop the payroll liabilities section from alerting me that I had overdue liabilities. That was the best I could think of - if you or anyone else has a better idea- I'm all ears.. or eyes. Thanks!

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Level 1

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

Under the CARES Act sec. 2301 there is a payroll tax credit that the IRS won't be ready for until the 2nd Q, so it should be ignored right now.
Under sec. 2302 there is a payroll tax delay that is effective now.  That is, the due date for the employer's share of social security tax is delayed to 12/31/21 for 50% of the amount due, and 12/31/22 for the balance due.  Attached to this email is the IRS guidance on the payroll tax delay measure. 

I can see from this thread that Intuit has confused these two provisions, so its QB updates do not account for the delayed due dates under sec. 2302.  I have figured out a manual workaround, but it is labor-intensive!  

 

Below is what I'm doing in QB Desktop with Enhanced Payroll.  I don't know my way around QBO Payroll, but perhaps these instructions can be adapted to that program:

 

∙ Delay employer’s share of social security tax deposits (CARES Act §2302):

☞Has bsn received a Paycheck Protection Program (PPP) loan and if so, has it also received PPP loan forgiveness?
∙ If yes (which is unlikely by 4/15/20):  It’s not eligible for further deferments of social security tax payments

∙ If no (ie no PPP loan or no forgiveness yet on PPP loan):
Subtract employer’s share of social security tax from 941 deposit
∙ Select the 941 to pay
∙ In the “Payroll Liabilities” tab, select & cut the “Social Security Company” amount
∙ Paste the amount into your Windows Calculator
∙ Divide by 2
∙ In the E-payment Memo, type “(50% amount) due 12/31/21; (remaining amount) due 12/31/22"
∙ In the green check portion of the liability payment, change the amount to match the “Payroll Liabilities” tab amount

 

e-Pay the now-reduced 941 deposit


Set up custom payroll items for the employer’s share of social security tax:
∙ Switch to single-user mode
∙ Click the “Lists” drop-down menu & choose “Payroll Item List”
∙ At the bottom, click the “Payroll Item” drop-up menu & choose “New”
∙ Select “Custom Setup” & click “Next”
∙ Select “Company Contribution” & click “Next”
∙ Type a name for the item, e.g., “Deferred Co Soc Sec - 1st 50%
& click “Next”
∙ Complete the “Agency for company-paid liability box:
∙ Name of agency: United States Treasury
∙ Acct #: (EIN)
∙ Liability account: (leave it on “Payroll Liabilities”)
∙ Expense account: (leave it on “Payroll Expenses”)
∙ Click “Next”
∙ Tax tracking type: Choose “Co. Paid Other Tax” & click “Next”
∙ Taxes: Select “Social Security Company” which will, unfortunately, also select “Social Security Employee” & click “Next”
∙ Calculate based on quantity: Leave selection on “Neither” & click “Next”
∙ Default rate and limit:
∙ The rate you enter...: 3.1%
∙ If this item has an upper limit: (leave blank)
∙ Limit type: (leave it as is)
∙ Click “Finish” & “OK”

 

∙ Repeat for 2nd item name, e.g., “Deferred Co Soc Sec - 2nd 50%


Adjust the payroll liabilities for March:
Add the new Deferred liabilities for March:
∙ Click the “Employees” drop-down menu
∙ Choose “Payroll Taxes & Liabilities” & “Adjust Payroll Liabilities”
∙ Date & Effective Date: (date of last paycheck in March)
∙ Adjustment for: Company
∙ 1st row:
∙ Click in the white space under “Taxes & Liabilities|Item Name” to open a drop-down menu
∙ Choose “Deferred Co Soc Sec - 1st 50%”
∙ Amount: (½ of March Company Social Security liability)
∙ Memo: Company Social Security March 2020 total $(total amt); 50% due 12/31/21
∙ Select & copy the memo
∙ 2nd row:
(same as 1st except):
∙ Choose “Deferred Co Soc Sec - 2nd 50%”
∙ Memo: Paste selection & change year to 22
∙ Click “Accounts Affected...” button
∙ Select “Affect liability and expense accounts” & click “OK”

∙ Click “Next Adjustment”

 

Subtract regular company social security for March:
∙ Keep same dates as previous adjustment
∙ Item Name: Social Security Company
∙ Amount: - (amount currently due)
∙ Memo: Company Social Security March 2020 total $(total amt); 50% due 12/31/21; remainder due 12/31/22
∙ Click “OK”

 

Set up scheduled payments:
2021:
∙ Click the “Employees” drop-down menu & choose “Payroll Center”
∙ Click the “Pay Liabilities” tab
∙ Confirm the March social security payment has disappeared from the liabilities due this week
∙ Scroll to the bottom to “Other Activities” & choose “Create Custom Payments”
∙ In the “Select Date Range For Liabilities” pop-up, change dates:
∙ From: 3/1/20 (if a monthly depositor)
∙ Through: 3/31/20
∙ Click “OK”
∙ In the “Pay Liabilities” pop-up:
∙ Leave as is:
∙ ☒ To be printed
∙ Bank Account
∙ ☒ Review liability check to enter expenses/penalties
∙ Dates
∙ Change:
∙ Check Date: 12/31/2021
∙ Click “Yes” to transaction more than 30 days in the future
∙ Select “Deferred Co Soc Sec - 1st 50%”
∙ Below the check, in the “Payroll Liabilities” tab, paste into the memo: “Company Social Security March 2020 total $(amount); 50% due 12/31/21"
∙ Click “Save & Close” & “Yes”
∙ Click “Yes” to transaction more than 30 days in the future
∙ Leave alone the orange ! showing the check is yet To Print

 

2022:
Repeat except:
∙ Check Date: 12/31/2022
∙ Select “Deferred Co Soc Sec - 2nd 50%”
∙ Memo: “Company Social Security March 2020 total $(amount); remainder due 12/31/22"

 

Note: Will have to make adjustments for April liabilities too.

 

Highlighted
Level 2

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

@boxarpress Your solution makes perfect sense however when selecting the EmployEE portion of the social security taxes, Quickbooks AUTOMATICALLY selects the EmployER share as well. There is no way to select only the employee share at this time. According to support, they are "working on it". They need to work a little faster. It seems like it should be an easy fix.

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Level 2

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

I would leave the funds in the Liability account showing that you owe it.  Where did you put the funds on your COA?  If you created a Employee Retention Credit as a Liab you should be ok, if not, it will not be correctly reflected on your Balance Sheet.

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Level 2

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

Not sure if you got my emailed response, so thought I'd put here.

 

Create the check, then delete the ER SS line item (CTRL & Delete button).  This will remove that portion, return it to the payroll liab account and leave the payment at the correct amount you are paying.

 

You will see the Red! on the home screen for Payroll Liab, but I just ignore it.  I would say, check occasionally to be sure that there is nothing else causing the !, but otherwise, this works without a ton of additional entries.

 

Best of luck!

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Level 2

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

Create the check, then delete the ER SS line item (CTRL & Delete button).  This will remove that portion, return it to the payroll liab account and leave the payment at the correct amount you are paying.

 

You will see the Red! on the home screen for Payroll Liab, but I just ignore it.  I would say, check occasionally to be sure that there is nothing else causing the !, but otherwise, this works without a ton of additional entries.

 

Best of luck!

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Level 1

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

I was able to "edit" my payroll tax deposit check once I created it.  I simply deducted the Employer Portion of the SS tax; which will be a liability left to pay at a later date.

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Level 1

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

I was able to "edit" my payroll tax deposit  amount by simply removing the Employer Portion of the SS; which then left is a a liability to pay at a later date.

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Level 2

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

Has QB instituted an easier way of deferring of the employer's portion of social security?

Highlighted
QuickBooks Team

What is QB's plan of how to handle the deferral of 941 payroll taxes in the CARES act? Will instructions come out and will people have to option to defer or not?

Hi teeshee. Everything is happening so fast and I know this can be a stressful time with all the changes. We are currently working day and night with our Payroll Support Team to get this update released. I do appreciate your patience during all of this because I understand how it has negatively affected so many. We will be providing information on the update as soon as it becomes available. If there's anything else I can do, please let me know.

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