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DELETE: How to setup Colorado FAMLI deduction

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Description

Employers and their employees are both responsible for funding the program and may split the cost 50/50. The premiums are set to 0.9% of the employee’s wage, with .45% paid by the employer and .45% paid by the employee. Employers may also elect to pay the full amount if they choose to offer this as an added perk for their employees. While employees cannot take FAMLI benefits until 2024, premiums are due under the program starting January 1, 2023. Businesses with nine or fewer employees do not have to contribute to the program but do need to remit their employees' share (0.45%) of the premium on behalf of employees each quarter.

For more information on subject wages visit
famli.colorado.gov/sites/famli/files/An_Employer%27s_Guide_to_FAMLI_.pdf or the
Colorado State website


Resolution

Before you begin: Consult with your tax Advisor for any questions about the method of calculation, limits and taxable status of this deduction. Sage Support Analysts are unable to recommend tax advice. For more information on subject wages visit https://famli.colorado.gov/sites/famli/files/An_Employer%27s_Guide_to_FAMLI_.pdf

 Sage BusinessWorks 2023 has been updated to include tax calculation methods of % SUI, % SDI and %OASI. If you choose to use one of these calculation methods you will need to upgrade to Sage BusinessWorks 2023.

To setup the deductions:

In the example below the TOTAL contribution amount is .9% which is split between .45% for the employee and .45% for the employer. A deduction will need to be created for both the employer and the employee.

  1. Contribution for EMPLOYEE:
    • Select PR, Utilities, Maintain Deductions
    • Click the 'New' button on the toolbar and define a deduction for the employee's portion or contribution to FAMLI:
    • Method (of calculation): Check with your tax advisor or Plan Administrator for the plan's specific calculation method
    • Category: 'System ' (to specify the .45 amount for each employee with the deduction assigned)
    • Credit account: Specify the liability account defined for FAMLI
    • In the 'Amount' field enter the .45 rate
    • Limit, if any: $720.90 per year
    • Active: Always
    • Taxable boxes: Check with your tax advisor or Plan Administrator for the plan's specific tax requirements
    • Tax category: Select Local
        NOTE: If local is not selected, the information will not populate on the CO FAMLI Report
    • Consult with your tax advisor to determine if these wages should be included in box 14 of your W-2
  2. Contribution for EMPLOYER:
    • Select P/R, Utilities, Maintain Deductions
    • Click the 'New' button on the toolbar and define a deduction for the employer's portion or contribution to FAMLI
    • Method (of calculation): Check with your tax advisor or Plan Administrator for the plan's specific calculation method
    • Category: 'Company-Sys ' (to specify the .45 amount for the employer portion for each of your employees with the deduction assigned)
    • Credit account: Specify the liability account defined for FAMLI deductions
    • Debit account: Specify the expense account defined for the employer contribution
    • Amount: Enter .45 for the rate
    • Limit, if any: $720.90 per year
    • Active: Always
    • Taxable boxes: Check with your tax advisor or Plan Administrator for the plan's specific tax requirements
       NOTE: If the taxable boxes are checked on a deduction, then the amount of the deduction will be added to the employees taxable wages. This could cause incorrect reporting on the CO FAMLI report. Uncheck the taxable boxes to not include the amount of the deduction in taxable wages. 
    • Tax category: Select Local
        NOTE:  Local must be selected for the information to populate on the CO FAMLI Report and the W-2 boxes 18, 19 and 20. 
    • Consult with your tax advisor to determine if these wages should be included in box 14 of your W-2
  1. Add both deductions to each employee in PR, Employees, Maintain Employees, Deductions

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