Is SOC_E exempt from COVID Pays?

We are not exempting SOC_E Taxes from COVID Pays within our software.

Eligible employers do not need to pay the SOC_E tax on these specific wages. Not all companies are considered “Eligible”.

Taxable and Subject to values can be inaccurate when an employee is marked as exempt when paying COVID pays. Some of those issues can arise when the adjustment method has not been changed back to no adjustment and usual wages are now being paid to the employee with No Taxable or Subject to amounts. Recalculate Subject to would need to be run to adjust the Taxable, and Subject to amounts. SOC_E is a self adjusting tax and this tax will then self adjust causing the overpayment of these taxes.

We are recommending that you have this tax calculate and use the COVID Pays report to see the Pay amounts, the MED_E , SOC_E, and health fringe that calculated on those earnings and use that report as a tool to reduce your current tax liability.

The Deposit Summary report will show the Federal Tax Liability, and the amounts on the report for the COVIDSICK, COVIDFMLA, Health Fringe, MED_E and SOC_E amounts would be used to reduce your tax payment.

Additional information can be found at the following:

https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs

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