The Internal Revenue Service (IRS) recently posted notice providing employers guidance on reporting Emergency Paid Sick Leave Act (EPSLA) and Emergency Family and Medical Leave Expansion Act (EFMLEA) wages paid pursuant to the Families First Corona Virus Response Act (FFCRA).
Employers paying FFCRA wages for qualifying leaves must add all FFCRA wages paid to those wages reported in Boxes 1, 3 (up to social security wage base) and 5 of Form W-2, and must report the type and amount of wages paid, separately, in either Box 14 of Form W-2 or on a separate statement, according to the following categories:
- The total amount of EPSLA qualified sick leave wages paid, “subject to the $510 per day limit”, because the employee: (1) “is subject to a Federal, State, or local quarantine or isolation order related to COVID-19”; (2) “has been advised by a health care provider to self-quarantine due to concerns related to COVID-19”; or (3) “is experiencing symptoms of COVID-19 and seeking a medical diagnosis.”
- The total amount of EPSLA qualified sick leave wages paid, “subject to “the $200 per day limit” because the employee: (1) “is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19”; (2) “is caring for a son or daughter of such employee if the school or place of care … has been closed, or the child care provider … is unavailable, due to COVID-19 precautions”; or (3) “is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretaries of the Treasury and Labor.”
- The total amount of EFMLA wages paid with language labeling the amount: “emergency family leave wages.”
Additional information may be provided regarding the FFCRA wages reported in Box 14 of Form W-2 or on in the separate statement. The notice provides model language, subject to modification by the employer as necessary, specifying the amounts and types of wages paid, as well as the daily limits for each type of compensation and provides further instructions for individuals with self-employment income to report.
If the employer utilizes a separate statement, rather than Box 14, to report FFCRA wages, the statement must be included with the Form W-2 that is sent to the employee, and if that W-2 is sent electronically, it must be sent “in the same manner and at the same time as the Form W-2.”
The lawyers at Faulkner Law Offices, PLLC can help employers and employees maneuver through these complex issues.