QuickBooks Covid-19 Payroll Items

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Payroll Item QuickBooks For Corona Pandemic


The Families First Corona Virus Response Act has come into effect from April 2, 2020, as a part of a range of health measures taken by the US government. The act expands the paid sick leaves to public health emergency declared by the government. Fewer employees work when sick and it is a mandate for employers to comply with the Family First Coronavirus Response Act (FFCRA) for those having fewer than 500 employees and government employers to provide paid sick leave to any fulltime employee. Part-timers are also entitled to this leave based on the average number of hours worked as a part-timer employee. In return, employers qualify for tax credits (up to certain cap limit) to offset the cost borne by them for providing these leaves.

Employees are permitted to exhaust the new COVID paid sick time before any other leave in their kitty. Only health care services or emergency responder employers may choose to exclude their employees from applying the Emergency Paid Sick Leave Act. You can dial toll free 📞 +1-866-497-0057 to collect more information , QuickBooks Payroll Helpdesk Number is open to serve you full day .

Discrimination or retaliation against the new paid sick leave or violation of the Emergency Paid Sick Leave Act attracts a prescribed penalty. You can read full terms and conditions QuickBooks Paycheck Protection Program to avoid any further issue .

Setting Up Covid-19 Paid Sick Leave QuickBooks Payroll

Setting up a separate payroll item is now required which is Not sick leaves to accommodate paid leave as per the government’s mandated quarantine norms. Earlier small businesses were trying to maintain their payroll by manually complying with the new act in QuickBooks payroll software which was mostly confusing.

Now to QuickBooks team has set up an appropriate pay type for COVID leaves so employers are able to track paid leaves or sick leaves due to Coronavirus, and correctly get these hours reported towards their tax credit later. Here’s the detailed process to resolve “How to Create a Payroll item for the COVID Paid Sick Leave?” –just follow these simple steps below:

Earlier it was not possible in QB to exclude these payroll items from employer social security tax. But now Intuit has also updated their instructions related to setting up of FFCRA paid leave payroll items in QuickBooks. To Create a Payroll item for the COVID Paid Sick Leave employers need to determine the employee’s benefit and hourly rate. Then they need to set up a “liability and expense” account for the COVID related paid leaves. Thereafter, they need to create a payroll and tax item.

Types Of Corona Pandemic Paid Leave Option QB

Step 1: Determine the Type of Employee Benefit Under FFCRA

  • National Paid Leave Employee: Sick due to COVID-19 and under quarantine
  • National Paid Leave Family: Employee taking care of a family member impacted / sick with COVID-19
  • National Paid Leave FMLA: Leaves taken by employee under the Family Medical Leave Act (FMLA) to care for children under 18 due to their school/child care being closed because of COVID-19
  • National Paid Leave – Health Credits: If the employer is contributing to employee’s health insurance and the employee is also being paid under the FFCRA provisions, a credit will be applied for the employer against their federal tax liability.
  • Determine hourly rates
    • Employees on commission: An hourly rate is to be created under the FFCRA which equates to the commission paid over the last 6 months divided by total hours worked in the last 6 months.
    • Tipped Employees: Ensure including the employee’s tipped income when entering their paid leave or FMLA expansion pay and also ensure that you’re paying them at least minimum wage as per FLSA, or your state, or local laws.

Corona Virus Expense Account Intuit QB Payroll

Step 2: Set Up Expense Account (For Eligible Wages To Be Used Towards Tax Credits Later)

  1. Go to Lists menu >> Select Chart of Accounts
  2. Select New from the Account drop down
  3. Choose Expense, >> Click on Continue.
  4. In the Account Type drop down >> Choose Other Expense.
  5. Give a suitable name such as COVID-19 Expense in Name field >> Click Save and Close

Payroll Item Corona Leave QB

Step 3: Set Up a Payroll Item

After identifying the type of employee and accounts, proceed with creating the hourly payroll item

  1. First, go to the Employees menu >> Choose the option “Manage Payroll Items
  2. Click on New Payroll Item.
  3. Then click Custom Setup >> Click Next
  4. Select Addition>> Employee Loan
  5. Give Appropriate Name to the loan type (National Paid Leave EE orNational Paid Leave Family)
  6. In Expense account window, select COVID-19 Expenses
  7. In tracking type again give the appropriate name as in step 5 above
  8. Choose tax window >> Click Next
  9. Move to “Calculate Based on Quantity” window >> Now Choose “Calculate this item based on Quantity”>> New
  10. Move to the Default Rate and Limit window set up the rate (for National Paid Leave Employee the limit is $5110 / for National Paid Leave Family the limit is $2000).
  11. Set Limit Type to Annual

You can create National Paid Leave Family / National Paid Leave FMLA / National Paid Leave – Health Credits similar to step 3 above. . You can get additional information in Preparation for QuickBooks Payroll Protection Program .

Tax Item Covid19 in QuickBooks

Step 4: Set Up a New Tax Item
After the payroll item has been set, proceed to set up the tax items. This will ensure that the tax credit is also tracked accordingly.

  1. Go to Employees menu >> Select Manage Payroll Items >> Select New Payroll Item>> Custom Setup >> Click Next
  2. Go to Payroll item type >> Select Other Tax >> Select Next
  3. Choose National Paid Leave Credit in the Other tax window >> Click Next.
  4. In the option “Name used in paychecks and payroll”>> Enter in the text-field – “National Paid Leave Credit” >> Click Next.
  5. In the window “Agency for company-paid liability” >> Select the tax agency you pay your taxes to
  6. In the Liability account drop down >> Select COVID 19-Expenses >>
  7. In Expense Account drop down>> Select Payroll Expenses >> Click Next
  8. Proceed to Taxable Compensation Window & Select Finish

Now you can run a regular payroll

Help Covid-19 QB Basic, Enhanced , Full Service Payroll Item Setup

Once the payroll has been set to handle paid leave under the FFCRA, a regular payroll can be run. Please note that FFCRA covers up to two weeks of qualified leave. Also, after you run your payroll for FFCRA leaves, review your payroll report to check if the correct hours have gone towards claiming your tax credit. For further queries on creating and running payroll items, you can call the QuickBooks Support Number . It is a toll-free 📞 +1-866-497-0057 helpline for all queries related to QuickBooks and is open 24/7.

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