The Families First Coronavirus Response Act (the "FFCRA") , provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.
For those processing their Payroll within their own software certain updates and action must be taken to report and receive necessary credits for pay related to COVID-19.
If using Sage 100 2018 you will need to take the following action if using the payroll module. (There may be work arounds for those clients using Sage 100 2017 and earlier. We can discuss with your team.)
Instructions for Sage 100 2018 and later
1. Install Sage 100 Payroll 2.20.1
a. Sage Payroll can be updated independently of the Sage 100 Software version if using Sage 100 2018 or beyond. This compatibility will likely have limitations at some point with future releases.
b. If you are not able to install Sage 100 Payroll 2.20.1 because of 3rd part solutions (add ons). The following steps can be taken but payments stubs, registers and reports will NOT reflect the “Federal Other Taxes”
c. The below steps can still be processed with earlier version of Sage 100 Payroll 2.xx
d. Required for paying emergency paid sick or emergency paid family medical - Sage 100 Program Fix PR6024T for Sage 100 Payroll 2.20.1 - Download Here
e. Suggested resolves an issue where Direct Deposit ACH Generation is slow when Direct Deposit Interface Method is Manually Send ACH file - Program Fix PR6023T for Sage 100 Payroll 2.20.1 - Download Here
2. Run the Payroll Tax Update from the Payroll – Utilities – Payroll Tax Update
3. Create 3 New Earnings Codes Payroll – Setup – Earning Code Maintenance
a. Earning Type: Misc | Method: Standard | Emp Pay Rate: (Typically 1)
b. Emergency Paid Family Medical Leave (EPFMLA) – (Section 3601)
i. Under the FMLA, originally enacted under the Families First Coronavirus Response Act, employees of businesses with fewer than 500 employees are eligible for 12 weeks of family leave if they are unable to work because of a school closure or childcare provider closure. The first 10 days are unpaid, and the remainder of the leave is paid. This Act reiterates that an employer is only obligated to pay employees compensation at two-thirds of the employee’s regular rate of pay (must be at or above the federal, state, and local minimum wage) up to a cap of $200 per day and $10,000 in the aggregate per employee.
ii. Use Tax Rule -800123 for Emergency Paid Family and Medical Leave Note: When using this Earnings Code in Payroll Data Entry, you must not exceed the maximum $200 per day and maximum $10,000 for 10 weeks per employee.
c. Emergency Paid Sick Leave Self (EPSLS) – (Section 3602)
i. Under Emergency Paid Sick Leave, also originally enacted under the Families First Coronavirus Response Act, employees of businesses with fewer than 500 employees are eligible for up to 80 hours of paid sick leave. The Act reiterates that an employer is only obligated to pay employees up to a cap of $511 per day and $5,110 in the aggregate per employee for paid sick leave. Also if an employee is taking care of a child or a quarantined individual, the obligation is to pay compensation at two-thirds the employee’s regular rate of pay (must be at or above the federal, state, and local minimum wage) with a $200 cap per day and $2,000 cap in the aggregate per employee.
ii. The Act also clarifies that an employer’s obligation for paid sick leave ends when the employer has either paid the employee for an equivalent of 80 hours or where the employee has returned to work after utilizing leave provided under this section.
iii. Use Tax Rule -800121, Emergency Paid Sick Leave – Self Note: When using this earnings code in Payroll Data Entry, you must not exceed the maximum $511 per day and maximum $5110 for 10 days per employee.
d. Emergency Paid Sick Leave Others (EPSLO)
i. Use Tax Rule -800125, Emergency Paid Sick Leave - Others Note: When using this earnings code in Payroll Data Entry, you must not exceed the maximum $200 per day and maximum $2000 for 10 days per employee.
4. After completing the steps above, run the Payroll Status Check utility located on the Payroll Utilities menu and resolve any errors or warnings found. Note: This utility should be run in each company after installing any payroll tax update and payroll release to ensure no errors are found.
5. GL Accounts will need to be assigned in the following areas
a. Payroll – Setup – Department Maintenance
b. Payroll – Setup – Earnings Code Maintenance
c. Payroll – Setup – Company Tax Group
6. Tax Profiles need to be updated to mark the newly added Federal Checkboxes
As a reminder, in payroll data entry if you are paying an employee an earnings code(s) that is setup to use any of the tax rules listed above you will need to manually keep track of both the daily and overall maximum for each.
As of April 3, 2020 we know of the following additional changes that will be made:
Program change to adhere to the employer tax limit on Social Security wages
Update to the Quarterly Tax Report (awaiting federal guidance)
Updates to Federal and State Tax Reporting (Aatrix) (awaiting federal guidance)
There are several known issues with the program issued April 3, 2020 PR 2.20.1 and PR6024T (This is as of April 16, 2020 - updates to follow)
* Covid earnings must be entered in a separate check/direct deposit from other earnings in order to calculated tax correctly (This is resolved by updating Tax Tables
after 04/30/2020)
* The Federal Tax Deposit Subtotal is incorrect on the Employer Expense Summary
Individual amounts and GL postings are correct (see Sage kb Defect ID 111938) - (Resolved PR6024T was updated on 04/20/2020)
* The Aatrix Federal Tax Payment coupon (EFTPS form 8019) is incorrect - short by the amount of employee FICA and employee/employer Medicare.
* The daily and total maximums must be addressed manually
Resources:
IRS Website
IRS FAQ
Department of Labor Website
Sage Website for HR_6201 Setup