On your company’s COVID-19 Relief Center, you'll see a banner that details the tax relief your company has received by opting into the different aspects of the CARES act.
Here’s how you can break down that information further.
Social Security Tax Deferral
Through the CARES Act, eligible small businesses may have the opportunity to defer employer-paid Social Security taxes from March 27th, 2020 until December 31st, 2020.
You’ll be able to see deferral amounts on each applicable invoice after your ‘deferral date’ - the date at which you opted to the program through the COVID-19 Relief Center.
On said invoices, you’ll see the deferrals listed under the ‘Credits’ section of the invoice.
Each line will refer to an employee whose employer portion of Social Security tax is being deferred. You’ll be able to cross-reference the amounts listed in the credits section with what’s further up the invoice, under Employer Tax Contributions. Naturally, those amounts should match for each employee.
Remember that these amounts may differ by employee, though, as employer-paid Social Security taxes are based off of 6.2% of an employee’s pre-tax wages.
Employee Tax Retention Credit
The Employee Retention Tax Credit helps to keep employees on payroll by providing tax credits on qualified wages paid between March 13th, 2020 and December 31st, 2020, up to $5,000 per eligible employee.
You can opt in to the Employee Retention Tax Credit by visiting the COVID-19 Resource Center & enabling the tax credit. You'll have to confirm that your company meets the eligibility requirements listed out on that page.
Once your company opts in, you'll see tax credit items for the quarters you're applying for credits for.
Similar to how the Social Security Tax Deferrals are reflected on invoices, you’ll see credits for each employee retained on the bottom of a given invoice.
If there are not enough taxes to match the creditable amount on one invoice, you will see credits applied to subsequent invoices.
The totals of the credit amounts on any invoice with this credit type will equal what you see on the COVID-19 Relief page.
FFCRA Leave Payments Tax Credits
One key tenet of the CARES act is allowing employees to take paid leave, which is creditable to the company up to certain daily caps depending on the reason for leave.
If you’ve gone through the process to schedule FFCRA leave to your employees through Justworks, you’ll see associated credits on each invoice on which leave payments were processed.
Keep in mind that the credit amount shown here may not equal the amount paid by the company for FFCRA leave. This is because the creditable amount for a company is determined by the different employer and employee taxes.
If there are not enough taxes to match the creditable amount that is paid to employees on an invoice, the remaining credits will show on subsequent invoices.
Additionally, if you've had to reach out to your Account Manager or our Customer Success team about scheduling these payments retroactively, these credits will not automatically show up on the invoices at this time.