- The effective date of the Families First Coronavirus Response Act (FFCRA) which includes the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act is April 1, 2020. This applies to leave taken between April 1, 2020 and December 31, 2020.
- The federal government has approved the Families First Coronavirus Response Act (H.R. 6201). To read the full bill click here.
- As additional information and details become available, this article will be amended to include further information and suggestions on this new process. For any questions or clarification on required tax reporting please check with your Tax Advisor.
- As of April 3, 2020 we know of the following additional changes will still need to be made:
- Program change to adhere to the employer tax limit on Social Security wages (done)
- Update to the Quarterly Tax Report (done)
- Updates to Federal and State Tax Reporting (Aatrix) (done)
- For more information on the Families First Coronavirus Response Act (FFCRA), please see the details at the Department of Labor website:
CAUTION: Sage Customer Support does not provide assistance for issues related to third-party products or enhancements, hardware, report customizations, state or federal tax-related questions, or specific accounting questions. Please contact your Sage business partner, network administrator, or accountant for assistance. Please review this document for additional information on the scope of Sage Customer Support Services.e
In response to the Families First Coronavirus Response Act (FFCRA), three new earnings tax rules have been added to the Sage 100 Payroll tax calculation service.
The new Earning Tax Rules are:
• Tax Rule -800123, Emergency Paid Family and Medical Leave
• Tax Rule -800121, Emergency Paid Sick Leave - Self
• Tax Rule -800125, Emergency Paid Sick Leave - Others
Medicare and Social Security taxes for these new tax rules were also added. In Sage 100, we have previously grouped all Social Security and Medicare wages and taxes into one category (for regular wages, tips, group term life insurance, and so forth). Because these new emergency leave wages may need to be reported separately, we will not group the wages and taxes into the standard Medicare and Social Security categories. Instead, they will be treated as Other Federal taxes. This is the best way to handle these changes in a timely manner and to ensure that we have the data needed for future reporting purposes.
The new Federal taxes are:
- Federal Medicare Tax EPFML Employer Liability
- Federal Medicare Tax EPFML Withholding
- Federal Social Security Tax EPFML Employer Liability
- Federal Social Security Tax EPFML Withholding
- Federal Medicare Tax EPSLO Employer Liability
- Federal Medicare Tax EPSLO Withholding
- Federal Social Security Tax EPSLO Employer Liability
- Federal Social Security Tax EPSLO Withholding
- Federal Medicare Tax EPSLS Employer Liability
- Federal Medicare Tax EPSLS Withholding
- Federal Social Security Tax EPSLS Employer Liability
- Federal Social Security Tax EPSLS Withholding
What to do in Sage 100 Payroll 2.x:
- Must be on Sage 100 Payroll 2.20.2 or higher to have the ability to Print 941s for any Covid-19 earnings setup or updated in version 2.20.1. There are several program changes made between those versions so recommend just installing Payroll 2.20.2 and higher with attention to any 3rd party modifications to the Payroll module.
- Select Library Master, Role Maintenance for users that run Payroll quarterly reports. Select the 2 NEW worksheets under the Tasks Tab, Payroll, Reports. (Employee Retention Credit Worksheet & Emergency Leave Worksheet)
- Run the Payroll Tax Update utility located on the Payroll Utilities menu.
- Run the Payroll Status Check Utility to insure any other setup information has been accomplished
- Go to Tax Profile Maintenance and update all applicable tax profiles by selecting the checkbox next to each of the new Federal Taxes listed above.
- In Company Group Tax Setup, select the Federal tax group, and enter the applicable G/L Accounts on the Additional tab.
- Go to Earnings Code Maintenance and create 3 new earnings codes:
- Emergency Paid Family and Medical Leave (EPFMLA) – (Section 3601)
- Under the FMLA, originally enacted under the Families First Coronavirus Response Act, employees of businesses with fewer than 500 employees are eligible for 10 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.
- 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.
- Emergency Paid Sick Leave Self (EPSLS) – (Section 3602)
- 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.
- 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.
- 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.
- Emergency Paid Sick Leave Others (EPSLO)
- 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.
- 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.
- Emergency Paid Family and Medical Leave (EPFMLA) – (Section 3601)
- Earnings Type, Miscellaneous
- Method of Entry, Standard
- Select applicable Employee Pay Rate to use
- If this pay is Subject to Workers’ Comp, select the checkbox
- If this pay should be Excluded from ALE (Applicable Large Employer) Report, select the checkbox.
- Select the appropriate Tax Rule for each applicable earning:
- -800123 for Emergency Paid Family Medical Leave earnings code
- -800121 for Emergency Paid Sick Leave Self earnings code
- -800125 for Emergency Paid Sick Leave Others earnings code
Important Data Entry Reminders:
- 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.
- The tax calculation engine does not do any pay amount calculations, rate x hours calculation is done in the Sage 100 software. Meaning, whatever amount is shown on the data entry line is what is used to calculate the applicable taxes. The tax engine will not calculate 2/3 of an employee's pay rate. You will need to manually enter the applicable pay rate and hours you want to use for that employee on the line in data entry.
- See attached FAQ's for additional information.
Important: See the knowledgebase articles in the Related Resources section below for issues that Sage engineering is currently working on.
For details on reporting for Paycheck Protection Program see DocLink: Reporting for the CARES Act (H.R. 748) Paycheck Protection Program
REPORTING UPDATE: A new report is included in Sage 100 Payroll 2.20.2 to assist you in determining your Qualified Sick and Family Leave credit and allocated health plan expenses reported on the 941 Form. It is called the Emergency Leave Worksheet which is located on the Payroll, Reports menu.
For more information refer to KB article ID 105461, DocLink: My Qualified wages for the Employee Retention Credit and Sick and Family Leave credit are missing on the 941 form.
2020 W-2 Form
The three emergency earnings tax rules disussed above will automatically print in Box 14 on the 2020 W-2 Form. Do NOT select Box 14 for these FFCRA wages in Earnings Code Maintenance or they will duplicate and use the Earnings Code Description. See related resources below. They will use the following Box 14 W2 Names:
- EFMLEA - Earnings setup to use Tax Rule -800123 for Emergency Paid Family Medical Leave
- 200EPSLA - Earnings setup to use Tax Rule -800125 for Emergency Paid Sick Leave Others
- 511EPSLA - Earnings setup to use Tax Rule -800121 for Emergency Paid Sick Leave Self
Additional W2 Reporting Requirements regarding Social Security Wage and Tax boxes:
https://www.irs.gov/irb/2020-31_IRB#NOT-2020-54 under Part III Reporting requirements FFCRA_ Section III Reporting Requirements_Reporting Qualified Sick Leave wages and then Family Leave Wages.
DocLink: Reporting for the CARES Act (H.R. 748) - Employee Retention Credit
DocLink: CA Covid-19 Supplemental Paid Sick Leave effective 1/1/2021 - 9/30/2021. Hours Available requirement.
DocLink: How to print the Quarterly Tax Report for federal, state or local taxes
Attachment: 348_20230425110559_FAQ FFCRA for Sage 100.pdf