Coronavirus Aid, Relief, and Economic Security Act (CARES)

The Coronavirus Aid, Relief, and Economic Security Act (CARES) was passed into law in the United States of America and is retroactive for small businesses and other eligible entities harmed by COVID-19 between February 15, 2020, and December 31, 2021. It is important for you to fully understand the Act and how it will affect your organization. Click this link to a great resource for you to learn more about the CARES Act.

TRAXPayroll

It is your responsibility to validate your qualifications to claim the benefits of the CARES Act. TRAXPayroll provides a way for you to opt in using this benefit and to pay employees in accordance with the laws around it. It is up to you to be compliant with government regulations.

Additional pay types

TRAXPayroll has the following pay types added as Additional Pay options:

  1. CARES Employee Retention Credit (Payable)
  2. CARES Employee Retention Credit (Non-payable)

It is important to note that you cannot void a previous paycheck if it contains a CARES pay type.

Validation on Step 2 of Run Payroll

Negative amounts: Negative amounts will not be allowed for any of the pay types associated with CARES. If you attempt to enter a negative amount, you will see the error message below.

Cap amount requirements: On Step 2 of Run Payroll, we will perform the following validation to ensure that you do not exceed the cap limit on any individual employee. The cap amounts are as follows per employee.

  1. CARES Employee Retention Credit Payable: $10,000 per quarter at 70% or $7,000 credit ending December 31, 2021.
  2. CARES Employee Retention Credit Non-Payable: $10,000 per quarter at 70% or $7,000 credit ending December 31, 2021.

Cap amount error messaging: If any of the employees in the payroll exceeds the cap amount, we will show the error message below.

What should I do if my federal credit exceeds my federal liabilities?
  1. If your credit is greater than your liabilities, we will insert an offsetting tax adjustment fee for the amount of the extra credit.
  2. Our Tax Admin team will fill out the Form 7200 on your behalf to enable you to receive a refund for the extra amount from the federal government.

If your federal credit exceeds your federal liabilities, you will see the following message in Step 3 of Run Payroll.

What if I want to defer the Employer Social Security Tax as part of CARES?

The option to defer this tax has ended as of December 31, 2020. 50% of the deferral amount taken in 2020 is due to be paid by December 31, 2021, and the remaining 50% is due by December 31, 2022. If you would like to begin your payback on this tax, please reach out to a payroll support hero.

Reports

When using CARES pay types, you can expect to see the corresponding data appear on the reports like the Cash Requirement, Payroll Register, Paycheck Protection Program Report, and employee pay stubs. The screenshots below will show you where that information will display in each report.

Payroll Register

If you use the social security deferral, the Payroll Register will show something similar to the screenshot below.

Paycheck Protection Program Report

You can utilize the information in these reports for your loan application process under the Paycheck Protection Program. It is your responsibility to determine whether or not you qualify to apply for the PPP loan. You are responsible for all information submitted to the SBA or any lending institution to obtain a loan. 

It is important to review and confirm the accuracy of the information contained within this report and the information you would provide as part of your application. The information in this report is based on gross pay and has exclusions (noted below). Depending on your situation, it may not fully entail all data needed to complete your application accurately.

In addition to this report, you will need the 940 and 941 reports in the TRAXPayroll report library to complete your application successfully.

Click here to learn more about the Paycheck Protection Program.

You can run the Paycheck Protection Program Report for any custom date range using the date range filters at the top of the report. This report is only available in Excel format, not PDF.

This report includes the following information:

Rows:

  1. Month and year
  2. Total of each column
  3. Average payroll cost (for all months included in the report)

Columns:

  1. Gross Pay $ amount for the month
  2. Employer Taxes State and Local $ amount for the month
  3. Employer Taxes SSN / Med $ amount for the month
  4. Employer Benefit Cost for the month
    • Employer-paid amounts for group health care benefits and insurance premiums, including the employers' share of medical, dental, and vision premiums.
    • Employer-paid short-term disability, long-term disability, 401K, and HSA contributions.
  5. Payroll Cost (sum of all previous columns)
  6. # of Employees Paid in each month

This report excludes the following information:

  1. When an employee has over $100,000 in gross pay wages and the month that they reach that amount, the excess wages will not include in the report from that point and forward. Additionally, it will exclude the applicable taxes and deductions that correspond to excess wages.
  2. It does not include workers' compensation premiums.
  3. It does not include contract workers, just full-time and part-time employees.

If you have joined TRAXPayroll after 1/31/2020, you will receive an error message letting you know you will not be able to see the data in this report. Please reach out to a payroll support hero (1-866-872-9123 or payrollhelp@bamboohr.com), so we can assist you with getting the correct information.

Employee paystubs

If an employee has any of the CARES pay types used during a pay period, they will show on the paystub in TRAXPayroll and BambooHR. They can view the total dollar amount allocated to that pay type paid to them during the pay period.

What's next?

Do you need to read more about how to handle the changes with the FFCRA?