Is PowerSchool building an update in HR/Reference Tables/Pay Codes to allow us to accomodate this:
"Under the section 7005 special rule, all employers (private and governmental) are exempt from paying the IRC 3111(a) Social Security tax portion (6.2%) of FICA on all wages required to be paid under FFCRA. However, there is no exemption from paying the IRC 3111(b) Medicare portion (1.45%) of FICA on FFCRA required wages..."
I have tested pay codes trying to use the Medicare Only option, but it doesn't work as the employee is still required to pay their FICA portion.
Laura Taylor, SAU 19 Goffstown NH
Thank you for bringing the issue to our notice. I have forwarded the issue to the eFinancePlus COVID-19 team to look into.
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Districts may defer the payment of their EmployER share of FICA. However, you would want to track the amount of this, because it needs to be paid in with future Form 941 - 1/2 by 12/31/2021 and the balance by 12/31/2022.
Districts may allow their EmployEEs to defer deduction of FICA during the period September 1 through December 31 2020, and must then collect that amount and pay in with future Form 941 during the January to April 2021 period.
To track this, customers may either the FICA deduction amount for EVERYONE equal to 0% for the period, and it will track the gross that should have been subject to FICA. OR, if only selected people are taking advantage of this opportunity, they should have a separate negative deduction that calculates based on the FICA gross to restore the money to their pay. This allows you to maintain a record of what is due to be deducted in 2021 from those employees' pays.
We do not have information from the IRS on how this should be reported on the employee W2 at this time. We may need to make adjustments to reporting quickly, once they release their requirements. We hope that the above two methods will provide tracking of the information so that the right data can be reported.
There are additional issues with Sick Pay which MAY allow districts to defer FICA and/or Medicare permanently - most of this has to do with employers receiving tax credit, which school districts are typically not eligible to receive.
There are also state ramifications to the Sick Pay, and we are analyzing the information we have received from a few customers to determine what impact this may have, if any, for their particular state reporting. So far, we have been contacted by VT and PA customers.
We are not making changes to the baseline functionality of the FICA and Medicare tax calculations - this is expected to be a temporary situation, ending 12/31/2020. If the situation changes, and permanent changes occur, we will review any new information and requirements for their impact within our software.
I know it's been asked a few times but we are hoping some one has figured out a work around by now. We have separate pay codes set up for E-Sick Leave and the EFMLA however, we have been unable to remove the ER FICA portion being charged. Right now we are just making a journal entry after the fact in recording but it's tedious in looking up wages and FICA portion. Below is the Form 941 instructions that states we are not liable for the ER FICA portion on the qualified sick and family leave wages.
Per the Form 941 Instruction, bottom left of Page 10 – Under EPSLA AND EFMLEA - TIP - Government employers aren't eligible for the credit for qualified sick and family leave wages; however, as with any employer, government employers aren't liable for the employer share of the social security tax on the qualified sick leave wages paid to employees
Thanks for any help!
You could put in a negative benefit calculated based on the particular paycodes and distribute same as FICA.
Having the specific paycodes will help you with the build for W2s later on, so it's worth doing.