Hi Everyone,

I wanted to address the question we've been getting regarding the COVID pays that are exempt from SOC_E tax for eligible employers. The software does not have a way to exempt a single pay from a single tax.

What we recommend is paying your COVID pays on a separate check. We have created a report attached to article 103997 How do I set up pays to pay employees associated with the HR_6201 - Families First Coronavirus Response Act? that you can use to track COVID wages and tax amounts that can be deducted from your tax payments and filings.

For more information, review the IRS FAQs at https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs

Hi Everyone,

I wanted to address the question we've been getting regarding the COVID pays that are exempt from SOC_E tax for eligible employers. The software does not have a way to exempt a single pay from a single tax.

What we recommend is paying your COVID pays on a separate check. We have created a report attached to article 103997 How do I set up pays to pay employees associated with the HR_6201 - Families First Coronavirus Response Act? that you can use to track COVID wages and tax amounts that can be deducted from your tax payments and filings.

For more information, review the IRS FAQs at https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs

I don't see a report in the KB article you linked - can you show us where to find it?

Hi Mike,

It's there now, at the bottom of the article.

I'm confused still.  If the Sick Leave is not subject to Employer SS Tax, why would you not just delete the Accrual of the Employer SS Tax when processing the payroll check?  Maybe I am missing something.

Hi Aleisha,

Social Security Tax (SOC and SOC_E) Along with the Medicare taxes (MEDADDL, MED, MED_E) are self-adjusting. In this case, the system looks at the YTD Subject-To for SOC_E to determine what the YTD Tax should be and withholds the difference on the next check.

We do not have a way from stopping SOC_E wages from accumulating, so if you 0 out the tax, the system will add it back on to the next check along with any new tax amounts.

See this article for more information:

How Does Payroll calculate taxes?

Thanks!

I just want to make sure I understand this correctly.  There is no way to stop the system from calculating the SOC_E so the suggestion to create COVID FMLA payments on a separate check is to is easily isolate that amounts that were calculated.  That being said, we do not pay the SOC_E but it will be recorded in my liability account, so the credit I claim on the MED_E will offset the MED_E liability but I will have to do some other journal entry or something to offset the SOC_E liability.

So I will create the new pays, create the Sick/FMLA payments on separate checks, use the COVID payroll report to identify the gross pay and MED_E amounts for claiming my credit and also to identify the SOC_E that I will have to back out from the liability recorded in the GL.

I cannot just delete the SOC_E amount from the FMLA check or it will make it up later on when the employee is back to work.  Correct?

I cannot get these pays to work.  Talked to Sage and they looked at my setup and said everything looks great, but it will not pull a check for the 40 hour week.

Did you ever get a reply on this? Looking for some guidance on this. Thank you.