Information for COVID-19 Changes

May 15, 2020 Payroll Tax Update and Covid-19 eligible EFMLEA Leave

The following instructions are related to the May 15, 2020/May 10, 2020 Payroll Tax Update.

US Social Security Employer exemption for qualified Emerency Family and Medical Leave Expansion Act

This Tax Update contains changes related to FFCRA Emergency Family and Medical Leave Expansion Act wages. If you have employees entitled to this type of pay, you will need to create the following new Income factor:

COVIDFAMILY - Qualified family leave wages you paid to your employees under the Emergency Family and Medical Leave Act under the FFCRA. This requires employers with less than 500 employees to provide public health emergency leave under the Family and Medical Leave Act of 1993 to an employee who has been employed for at least 30 calendar days. The requirement to provide leave generally applies when an employee is unable to wok or telework due to the need to care for a child under the age of 18 because the school or place of care has been closed, or the childcare provider is unavailable, due to a public health emergency. The first 10 days for which an employee takes leave may be unpaid. During this period, employees may use other forms of paid leave, such as qualified sick leave, accrued sick leave, annual leave, or other paid time off. After an employee takes leave for 10 days, the employer must provide the employee paid leave for upt to 10 weeks. The qualified family leave wages can't exceed $200 per day or $10,000 in the aggregate per employee for the year.

This Income must be subject to US SS and any other taxes related to this sick pay. Once you create this Income factor, apply it to your eligible employees.

If you previously created an Income for this type of family leave under a different name, you should change the Income name to COVIDFAMILY. In order for this change to be applied to eligible family leave, it must be called COVIDFAMILY in all caps.

In order to apply the US Social Security employer side exemption to eligible family leave, please follow these instructions.

  1. Close any open pay periods in Payroll/Close Pay Period Checklist.
  2. Go to Payroll/Configure/Income and click New.
  3. Enter COVIDFAMILY in the Name box.
  4. At Earnings subject to, click the notepad and select any taxes this pay should be subject to. Make sure to include US SS.
  5. Click OK and Save changes.
  6. Go to Payroll/Configure/Employees.
  7. Click on an eligible employee.
  8. Click New and assign the new Income called COVIDFAMILY.
  9. To check that you have set up the Income correctly, after you run Calculate Payroll go to Payroll/Print/Payroll Register and check the box next to Show employer contribution?
  10. Click Preview or Print.
  11. The amount listed on the US SS (Employer) line should be blank.

If you previously created an Income for eligible Family Leave but called it something else, please follow these instructions.

  1. Close any open pay periods in Payroll/Close Pay Period Checklist.
  2. Go to Payroll/Configure/Income.
  3. Click on the name of the Income factor you created.
  4. Change the name to COVIDFAMILY.
  5. Make sure this sick leave is subject to US SS.
  6. Click OK and Save changes.

If you previously ran payrolls that included EFMLEA family leave and the employer side of US SS was calculated, the system will calculate the difference and apply it to the next payroll that includes COVIDFAMILY pay for any employees. If you will not be running any payrolls that include this family leave due to the government mandated qualified leave threshold, we recommend that you void any previous payrolls that included this sick pay and recalculate payroll with this new Income. The amount of the payroll checks issued to employees will be the same.

If you have questions or need assistance with the above information, please send us a Problem Report by going to Help/Submit Problem Report. If you are an employee subject to the Railroad Retirement Tax Act, please contact us.

IRS Information related to Sick Leave: