Configuring System-Level Parameters

Billing event to track employer-side Medicare tax credit rebates for COVID-19 leave.

Billing event to track credits for deferred employer Social Security taxes.

Billing event to track credits for healthcare-related benefits payments allocated under the CARES Act.

One or more pay codes to use for COVID-19-related sick leave payments when the employee takes time off to care for a dependent.

Select whether to enforce the federally defined tax credit caps. You can limit based on either the daily and aggregate or daily cap. You should use the same setting as Default Wage Cap Logic.

Use this setting to determine the logic the system employs when calculating client credit rebates rebates. There are three options: No Limits, Cap at Client QTD 941 Liability, and Cap at Payroll Batch 941 Liability. The first option simply applies the full rebate to the client. However, we recommend using one of the other two settings. These settings only rebate clients up to their 941 liability (either quarter-to-date or for the current payroll batch). In other words, the amount available to rebate for a payroll = 941 Liability minus system-generated rebates, for the quarter or batch.

Medicare tax calculation is included in the total client 941 liability, but is rebated separately.

If the rebate for a payroll batch is higher than the 941 limit, the system creates a client bill pending entry with a date of 10/14/2241 for the amount left over after reaching the limit. The choice of date is meant to completely prevent the entry from being pulled into the next payroll run.

For example, if you select the third option and you have $1,000 in creditable wages/ $50 in Medicare tax for a payroll and, in this payroll, you have $2,000 in un-rebated 941 liability, you can rebate the full $1,000 for the payroll because there is enough liability to rebate against. The $50 Medicare rebate is deducted separately.

Note:  This option is enabled by default. Leave this option enabled if you want to continue to use the system's default logic. However, the draft of the new Form 941 implies that Medicare tax credits should equal a straight 1.45% of accrued credits under 00-80 and 00-81. If you want to follow this guidance instead of using the system logic, deselect this option.

Select this option if you want the system to calculate Medicare tax credits (00-82) as either 1.45% of the accrued Families First credits OR the actual employer Medicare tax amount on the associated voucher (whichever is less). This is the default system logic.

If you do not select this option, the system calculates this credit only using the first strategy, taking the credits accrued under 00-80 and 00-81 and multiplying them by 1.45%. This is the logic implied by the draft Form 941.

Note:  This logic also applies when you run the COVID-19 Recalculation tool (see Recalculating COVID-19 Credits Retroactively).

In the system, 00-80 and 00-81 credits accrue on sheltered wages. This can affect the values in boxes 5a(i) and 5a(ii) of Form 941, potentially implying that the employee went over the tax limit when they did not. You can use this option to determine how the system handles sheltered wages related to COVID-19 payments. Select None if you want to preserve previously described system behavior and continue including sheltered wages in these calculations. Otherwise, select one of the other options below.

Select this option if you want to use the value in the Bill Amount column (under the Billing Voucher Payroll Tax tab) when displaying taxes on the Payroll Cost Report. Otherwise, the system uses the tax liability as displayed on the employee voucher.

Select this option if you want to use the benefit plan Premium Amount (reflective of the Bill Rate) to calculate the Health Care Costs column in the Payroll Cost Report. Otherwise, the system uses the Premium Cost to calculate this value. In either case, the system subtracts the employee contribution from this value to determine the health care cost.

Both these values refer to columns in the Benefits tab of employee Payroll Vouchers.

Select whether or not you want to display the custom lookback period fields on the FTE Report setup form.

Select whether you want to display 00-84 credits (including tax adjustments) on the PPP Payroll Cost Report.

Select this option to prevent the system from deferring Social Security tax on employees whose pay period compensation exceeds the IRS and Treasury-imposed limit ($4000 per bi-weekly pay period, or the equivalent amount for that employee's pay period type). This feature takes effect during payroll processing. For details, please see Deferring Employee Social Security Tax.

Select this option if you want to display labeled 00-80 and 00-81 qualified wages in Box 14 of employee Forms W-2. The values for 00-81 are further broken down and labeled depending on whether they are associated with dependent care or self care.

If you create employee Forms W-2 with this option enabled, the system first checks the pay code parameters above to determine which pay codes correspond to self care leave and dependent care leave. The system then checks the employee's pay history for the year. If the employee was paid under both pay codes, the system allocates the employee's pay proportionally on the W-2. If the employee was only paid under one of the pay codes, all 00-81 wages are allocated to the appropriate 00-81 category.