CARES Act
Name the tax eligible for deferral per the CARES Act
What is ER Social Security Tax
If a client is taking a small business loan, are they still eligible for the FFCRA credit?
What is, yes.
They would still be eligible for the FFCRA tax credits, if they meet all the other requirements to receive those credits.
What does FFCRA Stand for?
What is Families First Coronavirus Response Act
How can I ensure I am paying EEs out at 2/3 their rate?
What is the earning is setup to calculate at 2/3 the rate of pay entered.
The 2/3 rate calculation occurs when you process your payroll, not on the timecard. We are working on adjusting this to where it shows on the timecard, but for now you'll see the 2/3 rate when you process the payroll.
Q: If the client wants to pay the remaining 1/3 of pay, how will the system accommodate?
A: The system is set up for 2/3 pay, so if the client wants to pay the full amount they will need to create a separate earning. They will either need to use a temporary rate to do 1/3 rate and apply to the hours (risk of overstating hours) or they can calculate the difference in pay and use a fixed earning.
When will student loans begin applying to payroll again?
What is 10/1/2020
How long is this tax deferral in effect?
What is the remainder of 2020.
In alignment with current IRS provisions, the deferral opt-in will be in place for the remainder of 2020. If at any time a client would like to opt-out of the deferral, they are able to.
What printing precautions has Paycom taken and communicated to clients due to COVID-19?
What is temporarily suspending printing reports by Paycom.
All other printing services, including paychecks, will be printed.
Production team precautions:
- wearing gloves
- social distancing
- daily temperature checks
Which portion (Act) within FFCRA allows the below: following 10 days of unpaid leave or paid sick leave, applicable employees may qualify for up to 10 additional weeks of job-protected leave at two-thirds their regular pay rate, if you determine they’re eligible.
What is Family Medical Leave Act expansion
How will clients receive their 941 tax credits under the Families First Coronavirus Response Act (FFCRA)?
What is the system will calculate the total necessary payroll tax credit on the current transaction and apply it to the Cash Requirement. This will reduce the client's liability, but will be visible for them to see the benefit. Also, if the amount of the credit exceeds the total available 941 tax withholdings, a COVID-19 Excess Credit will appear. This will need to be requested as an accelerated credit directly from the IRS.
Which Garnishments are impacted by the COVID-19 Legislation?
What are Federal Student Loans
If a client opts into utilizing the CARES Act, when is the deferred tax due?
What is December 31, 2022.
Also accept, what is 50% 12/31/21 and remainder 12/31/22.
What is Engaging your workforce.
What are the 3 earnings for FFCRA and when can a client begin using them?
What is PSL Self, PSL Family/Dependent, PFL Dependent. 4/1/2020
all three earnings (6CV/7CV/8CV) are ER SSC exempt. This limit is calculated on the back end and applied as a credit towards 941 liabilities on the cash requirement.
To re-iterate, the limit is on the credit calculation on the back end towards 941 tax liability. It does not restrict the client from paying out. For example, if the employee makes $100/hr. and was paid out using [6CV] PSL Self for 8 hours, that would be gross pay of $800. However, the credit calculation would only consider $511 and that would be ER SSC Exempt. The remaining $289 would be treated as taxable earnings for ER SSC.
How does the CARES Act impact a clients GL?
What is GL & Cash Req will not match, additional liability account will be created when the deferral is enabled in online.
Your GL will reflect the total liability, but the Cash Requirement will have the employer side social security taxes zeroed out to accommodate the deferral. The liability that you are deferring will need to be mapped to your GL. This will reflect as a receivable once mapped on your GL.
In the past, the Social Security Tax would be an expense that's offset by an asset (cash). Now that they can defer, companies are going to need to be able to reconcile back to the period in which this tax occurred, but since they are deferring the payment, it no longer is part of their cash asset that is going out as an expense.
There has been a new liability account created that will automatically show up in GLC after your supervisor selects the COVID-19 CAREs Act flag in the Options Tab. It's called “COVID Tax Deferment". The client will need to map this on their GL (it will just show up as excluded). They'll set this up wherever on their map they want it to show, but it is ultimately an employer liability because they still have to pay it in the future. This is an increase to liabilities, but not a decrease to cash (because that part hasn't happened yet).
In the future, they'll be able to run these GL reports (or look at other payroll reports) to determine how much went into this liability, so they know what 50% is to pay at the end of 2021 and 50% for 2022.
If an employee wishes to continue paying student loan garnishments, what will need to occur?
What is the employee reaching out to their student loan agency to make payments
Does Paycom automatically defer SS tax for existing clients?
What is, no.
A client must request this and sign off on Deferral Instruction letter that will be sent to Contract Confirmation for approval and communication to NCS/PSD.
What is the difference between a furloughing and laying off?
What is
»A furlough is considered to be an alternative to layoff. When an employer furloughs its employees, it requires them to work fewer hours or to take a certain amount of unpaid time off.
•For example, an employer may furlough its nonexempt employees one day a week for the remainder of the year and pay them for only 32 hours instead of their normal 40 hours each week.
•Another method of furlough is to require all employees to take a week or two of unpaid leave sometime during the year.
»Employers must be careful when furloughing exempt employees so that they continue to pay them on a salary basis and do not jeopardize their exempt status under the Fair Labor Standards Act (FLSA).
•A furlough that encompasses a full workweek is one way to accomplish this, since the FLSA states that exempt employees do not have to be paid for any week in which they perform no work.
»An employer may require all employees to go on furlough, or it may exclude some employees who provide essential services. Generally, the theory is to have the majority of employees share some hardship as opposed to a few employees losing their jobs completely.
»A layoff is a temporary separation from payroll. An employee is laid off because there is not enough work for him or her to perform. The employer, however, believes that this condition will change and intends to recall the person when work again becomes available.
»Employees are typically able to collect unemployment benefits while on an unpaid layoff, and frequently an employer will allow employees to maintain benefit coverage for a defined period of time as an incentive to remain available for recall.
What are main criteria for FFCRA to be applicable?
What is
- Private organizations under 500 EEs
- Exemptions allowed for some under 50 EEs
- Certain Public Sector is covered, regardless of size
- Government entities (e.g. schools, hospitals, etc) but are NOT eligible for tax credits
What three (3) areas of the system will see enhancements due to COVID-19?
What is Payroll, PTO and Government and Compliance?
Payroll Enhancements
The following will be updated in the system in regards to earnings and payroll setup.
A new option within earning templates to dictate those that should calculate as an emergency sick leave earning.
Three new earnings will be applied to all applicable clients automatically, reducing the need for set up by the specialist. These earnings will be used for recording sick leave wages for employees.
A fourth earning will be set up as a memo earning for employers to record the employer incurred healthcare expenses. This will apply towards the tax credit.
An update to payroll calculations to exempt ER SSC Wages for earnings marked as an emergency sick leave payments. No change are necessary to the EE SSC Wage calculation.
An update to allow Wage Realignments to use this new earning option to exclude emergency sick leave earnings to be exempt from ER SSC wage calculations.
A development to set up a tax payment deferral framework to allow flexibility for any new state or federal payment deferral that may arise as needed.
A development to apply payroll tax credits to reduce the liability drafted for the client. Credit and excess credit will be identified on the Cash Requirement so clients can understand easily the benefit they are receiving.
PTO Enhancements
Additions will be made to our Accrual system to ensure clients comply with the limitations setup within the laws. If a client has accruals, they will have the ability to track all emergency sick leave in the system. If they have our PTO product, they will be able to have employees request off, supervisors approve/deny requests and then track usage of these hours.
Paycom will be creating a default bucket and policy to comply with the Federal requirements with flexibility to change based on state needs.
State requirements can be setup through creating a new bucket and/or policy and tying it to the earning identified as emergency sick leave.
Government & Compliance Enhancements
Additions will be made to the existing FMLA system to track time used under the new sick leave program.
A new FMLA Reason will be added to the current Reason for FMLA Request options for “Public Health Emergency”
The user will be walked through a wizard directing them based on the Federal requirements.
When used the hours will be deduction from the existing FMLA bucket for employees.
For state level requirements, the user can use the standard options as we will not be building this in at this time.
What is the process for Non-Full Service Garnishment clients?
What is TSR/NCS communicates the below:
“Legislation has been passed that will impact the way that you handle your garnishments. I would recommend reviewing this legislation in regards to your Student Loan Wage Garnishments to determine your next steps for deducting from wages. I can tell you that our Garnishments Department has moved forward with adjusting Student Loan Garnishments to a start date and/or deferment date of 10/01/2020. Ultimately it is your decision how you would like to proceed for your employees.”
o Request email confirmation from client
What does CARES Act stand for?
What is Coronavirus Aid, Relief, and Economic Security Act
What are the differences between FFCRA and the CARES Act?
What is
The FFCRA includes both the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act and applies to private organizations with fewer than 500 employees. Employers with fewer than 50 employees may be eligible for exemption if they meet certain qualifications. Certain public entities are also covered, regardless of size. Additionally, government entities (e.g. schools, hospitals, etc.) of any size are required to provide FFCRA-related benefits to employees. Government entities, however, are not eligible for the related tax credits. These acts implement two new paid leave requirements. Additionally, tax credits for all wages paid in accordance with the acts are available to employers. The IRS has provided guidance and FAQs here.
The CARES act is available to all employers and allows them to elect to delay payment of federal employer payroll taxes. Employers may elect to delay the deposit and payment of employer Social Security taxes (6.2%) effective immediately through December 31st, 2020. Under the new law, the payment of 50% of the tax will be due on December 31st, 2021, with the balance due on December 31st, 2022.
What are 3 main points of FFCRA?
What is
1. Emergency Paid Sick Leave Act
2. Emergency Family Medical Leave Expansion Act
3. ER Tax Credits
What are the names of the 2 new reports to assist with hourly EE identification within FFCRA?
What is the "Emergency Paid Sick Leave"
"Sick Leave Pay" report
Both can be found under payroll reports
When has this legislation been back dated to?
What is March 13th, 2020