W-2 Reporting Required for FFCRA Leave Pay
New Guidance Issued by IRS and Treasury Department
Employers are required to report sick and family leave wages paid to employees under the Families First Coronavirus Response Act (FFCRA) on Form W-2, according to guidance from the IRS and the U.S. Treasury Department. The guidance was provided in Notice 2020-54, issued by the agencies on July 8, 2020.
Employers will report FFCRA leave compensation in either Box 14 of Form W-2, or in a statement provided with the Form W-2. The reporting requirement additionally provides self-employed individuals who are also employees with the information necessary to claim sick and family leave tax credits related to their self-employment.
Under the FFCRA, covered employers must provide employees with up to 80 hours of paid sick leave and up to 10 weeks of partially compensated family and medical leave for COVID-19-related reasons. Tax credits are available to employers for wages paid under the FFCRA leave provisions.
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