The IRS has posted guidance on reporting FFCRA (Families First Coronavirus Reporting Act) emergency sick pay and extended family medical leave wages on W-2’s.
Click here for the full notice.
The main new requirement is that wages paid wages under the FFCRA have to be reported in Box 14 or on a separate statement. Due to the length of message that must print, Datatech will be programming this information to print on a separate statement after W-2’s are printed.
The following information details what that printing includes.
Reporting Qualified Sick Leave Wages
- Boxes 1, 3 (up to the social security wage base)
- and 5 of Form W-2 (or, in the case of compensation subject to the RRTA, in the amount of RRTA compensation paid to the employee reported in Boxes 1 and 14 of Form W-25)
- the total amount of qualified sick leave wages paid for reasons described in paragraphs (1), (2), or (3) of section 5102(a) of the EPSLA; in labeling this amount, the employer must use the following, or similar, language: “sick leave wages subject to the $511 per day limit;” and
- the total amount of qualified sick leave wages paid for reasons described in paragraphs (4), (5), or (6) of section 5102(a) of the EPSLA; in labeling this amount, the employer must use the following or similar language: “sick leave wages subject to the $200 per day limit.”
If you set up your Paid Leave Type Setup with a separate definition for each leave type, the software will automatically categorize the wages to the respective message that will print on the statement.
What happens if you did not define each leave type?
We have noticed many customers only defined two leave types, one for the Emergency Sick Pay and one for the Extended Family Medical Leave. Without having the breakdown to reason 1,2,3,4,5, or 6, the software can’t determine which message to print.
There will be further instructions with our year end update on how to categorize those wages before printing W-2’s and the Covid Leave wage statements.
Do Not Print W-2's If...
As mentioned, we will soon have further instructions on categorizing the leave reasons from the Archive records. So if you have leave and don’t have the reasons categorized, DO NOT print W-2’s until you follow the coming instructions.
Defining Covid Leave Type by Job
For farming operations and farm labor contractors that can define their Covid Leave Type by Job, you may elect to edit the payroll checks before the end of the year. Then, the software will automatically categorize the wages when closing.
At a minimum you would need 3 definitions. One for reasons 1-3, one for reasons 4-6 taken under Emergency Sick Leave, and one for reason 5 taken under the Extended Family Medical Leave.
To do this, follow these steps:
1. Add new Job/Phase codes for each category mentioned above.
2. Modify your Covid Pay Leave Table to Define separate classification for the different leave reasons:
3. Run a Labor Analysis Repor by the wage type, cost center and/or job used for the leave to obtain the checks that need to be edited.
4. Farm Labor Contractors can use the Edit Finalized Check on the Labor Reports menu to edit the Job codes on the Covid leave checks.
Farming operations would go to the Employee File that has Covid leave and use the look up on the Last Check #/Date field. You can use the Lookup to find the check(s) that need editing and modify as needed.
As mentioned above, we will have additional information if you need to classify these wages manually before printing W-2’s. We appreciate your patience as we are striving to complete the programming for these changes as quickly as possible.