The following are the COVID pay types that are supported in Zenefits. Note that you are responsible for calculating the amounts to be entered. The Zenefits system cannot do the COVID-19 calculations for you.
COVID-19 Time Off: used to record earnings paid to workers utilizing the COVID-19 Time Off requests in Zenefits.
The COVID-19 Self Care - Time Off and COVID-19 Family Care - Time Off types are available to be used in accordance with the Emergency Paid Sick Leave Act, or EPSLA. The COVID-19 EFMLA type is to be used in accordance with the Emergency Family and Medical Leave Expansion Act, or EFMLEA. To understand the differences between when each of these types should be used, we recommend you look through this Department of Labor resource.
COVID-19 Tax Credits:
Used to record earnings paid to eligible workers to receive federal tax relief.
Note: Employers that wish to take advantage of any COVID-19 tax relief credit options must make sure they understand:
For more details see the IRS resources on Employee Retention Credit.
These pay types will assist in ensuring that leave is being taxed appropriately. Please note that the COVID-19 pay types do not have built in limits. It is your responsibility as the employer to track any limits in accordance with the FFCRA.
Note: Employers that wish to take advantage of any COVID-19 tax relief credit options must make sure they understand:
For more details see the IRS resources on Employee Retention Credit.
You can see what amounts you ’ve entered in qualified wages and health expenses in the All In One report. The credits resulting from your entries are explained in these IRS resources on Qualified Leave, Qualified Retention and Qualified Health Plan Expense. It is each employer’s responsibility to ensure they are entering only the amounts that qualify for the corresponding credits.
If you ’ve entered an incorrect amount for any entries in payroll, you’ll need our support teams to help you correct the mistake. If the error impacts a tax period that has already been filed with the IRS, amendments to the impacted returns may also be required.
No, this will not affect your employee or be displayed to them at all. In order to expedite making the COVID-19 credits available to our customers, Zenefits relied on existing framework within our system. This means that in order to enter the credits for Employee Retention and Qualified Health Plan Expense, you'll need to use the Contribution section of an employee's pay stub that was previously reserved for employer contributions to the employee.
Note: Employers that wish to take advantage of any COVID-19 tax relief credit options must make sure they understand:
For more details see the IRS resources on Employee Retention Credit.
The entry options that Zenefits has provided allows employers to enter both qualified wages and health credits for any applicable second quarter payments and for any qualified employee retention or health expense payments made during the allowable March time frame.
Note: Employers that wish to take advantage of any COVID-19 tax relief credit options must make sure they understand:
For more details see the IRS resources on Employee Retention Credit.
The IRS requires employers to provide the amounts paid to employees as qualified sick leave wages or qualified family leave wages under the Families First Coronavirus Response Act. To help employers meet this requirement, Zenefits will display these wages in Box 14 per the IRS recommendations for the three specific wage types:
The taxation for the three existing leave earning types has not been changed.
Three new earning types will be added in Zenefits Payroll to handle the proper taxation and credit treatment.
Currently, employers are able to claim credit for the COBRA Premiums if they are entered into Zenefits payroll as qualified health expenses. The credit is applicable for the purposes of an employer claiming Employee Retention Credits (COVID-19 Employee Retention - Qualified Health Plan Expenses contribution type) for any taxable period through December 31, 2021.
The ability to claim the full COBRA premium credit amount available via Employee Retention Credits may be limited through the eligible expense limitations and caps that are applicable to the Employee Retention Credit. Employers should review the IRS instructions and consult with their tax advisor to determine whether claiming credit for COBRA premiums paid by employer is appropriate for them.
In addition to claiming the COBRA premium credit through the Employee Retention Credit under the CARES Act, Zenefits has also created a new employer contribution pay type specifically for the new COBRA Premium Assistance Credit authorized under the American Rescue Plan Act (ARPA). This new contribution pay type is called COVID-19 COBRA Premium Assistance. Contributions entered in this new pay type will allow the COBRA Premium Assistance credit to be calculated correctly and reported on the IRS form 941.
There is no cap to the amount of qualifying premiums that may be entered under this credit.
Any COBRA premium entries made via the existing COVID-19 Employee Retention - Qualified Health Plan Expenses contribution type will be reported as part of the aggregate Employee Retention Credit claimed on an employer’s Form 941, and will not be reported separately. The new contribution type for the COBRA Premium Assistance Credit will be reported as a separate line item on an employer’s Form 941.
Employers should consult with their tax advisor on which credit is appropriate for their needs. Employers remain responsible for any related record-keeping required by the IRS for audit purposes.
For the second quarter of 2021, these entries will be reported on the Form 941 and refunded directly from the IRS.
The new COVID-19 COBRA Premium Assistance contribution type is available in Zenefits Payroll. Customers are able to enter the amounts into payroll and have the credits applied against their Federal 941 deposits for the quarter in which they are entered.
To claim any COVID-related relief credits in Payroll to be included on your quarterly Form 941 filing, create an off-cycle pay run and add the qualified credits under the Employer Contribution section for each applicable employee.
Once the off-cycle pay run has been created for the impacted employee(s), add the credits by following these steps:
Once the off-cycle pay run is approved, the credit will be recorded on the associated quarter’s Form 941.
Note: For the purpose of keeping track of your relief credits, we recommend that you use an off-cycle pay run each time.
Still need our help? Our support team is waiting to help you. Contact us