As a result of the passing of the Families First Coronavirus Response Act (H.R.6201), small businesses will be able to take credits against their federal tax liability if the small business pays out wages that are classified as either emergency sick time pay or family medical leave of absence pay.
In order to properly track the amount of the credit and apply the credit to the federal tax owed, Gusto will pass the amount of the eligible credit through to your Xero and Quickbooks integrations.
Important: This will require the set up of new mappings to accounts in your accounting software. We strongly encourage consulting your accountant in the mapping of these accounts.
Your payroll entries will include two new components:
There’s no action required on future payroll runs if the accounting integration is set to auto-sync entries. You can pull the remaining balance of the credit in your accounting software at any time as a line item on your balance sheet.