W-2’s and Guidance on Reporting Qualified Sick Leave Wages and Qualified Family Leave Wages Paid Pursuant to the Families First Coronavirus Response Act

January 6, 2021

As your business begins the process of filing a Form W-2 for each employee, it’s important to remember that the IRS requires employers to report the amount of qualified sick leave wages and qualified family leave wages paid to employees under the Families First Coronavirus Response Act, P.L. 116-127, on either 2020 Forms W-2, box 14, or on a separate statement. This provides employees who are also self-employed with amounts they may need to figure their qualified sick leave equivalent or qualified family leave equivalent credits.

Additionally, Sections 7001 and 7003 of the Families First Act generally provide that employers subject to the paid leave requirements under Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act (“eligible employers”) are entitled to fully refundable tax credits to cover the cost of the leave required to be paid for those periods of time during which employees are unable to work or telework for reasons related to COVID-19.

Eligible employers are entitled to receive a refundable credit equal to the amount of the qualified sick leave wages and qualified family leave wages (collectively “qualified leave wages”), plus allocable qualified health plan expenses.

Please remember that the due date for filing 2020 Forms W-2 is February 1, 2021, whether using paper forms or electronic forms.

If you have questions, a tax accounting expert from Allen Barron, Inc. can help.  We invite you to contact us or call today for a free consultation at 866-631-3470 to learn more about our tax preparation, account and business advisory services. We’re here to help


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