COVID-19 Tax Credits FAQs Updates
Recently, the IRS added over 80 answers to the series of FAQs on COVID-19 Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses. These questions cover issues like eligible employers, qualified sick leave wages, qualified family leave wages, qualified health plan expenses, how to claim credits, sustaining eligibility, deductibility of tax credits, interaction of tax credits, third-party payers and self-employed individuals.
The changes affect the questions in all 13 of the subtopics covered by the FAQs.
Here’s what’s new:
Refundable tax credits are available to businesses for employee paid leave under the federal Families First Coronavirus Response Act (FFCRA), which was enacted in March 2020 and is effective through December 31st, 2020.
Under FFCRA, employees of businesses with less than 500 employees can get 80 hours of paid sick leave for themselves or to care for others. They are also eligible for an additional 10 weeks of paid family leave if they have a child whose place of care or school is closed or if child care providers are unavailable due to COVID-19.
The FFCRA tax credits provide the employer with funds to cover the costs of the employee leave. The tax credits are available for-
Qualified sick leave wages
Qualifies family leave wages
Qualified health plan expenses allocable to employee leave wages and
The employer's portion of Medicare tax related to qualified wages.
Taxes can be confusing, even without the chaos of 2020. We get it. And Landmark Tax Service is here to help you navigate your taxes as seamlessly, effortlessly, and hassle-free as possible. Talk to Robert Giaccone, CFP by calling (516) 284-1565 and learn what Landmark Tax can do for you.