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The IRS has updated its guidance for employers and tax professionals on the provisions of the federal coronavirus relief law that allow businesses to take tax credits if they provided paid sick leave and family leave to workers. 

The IRS’s online Frequently Asked Questions page was recently updated to address special issues employers have encountered for paid leaves that were taken under the Families First Coronavirus Response Act (FFCRA) prior to April 1, 2021. The FAQs also address specific provisions related to FFCRA and self-employed individuals. 

Tax professionals and employers are directed to two new questions and answers that have been added to the FAQs (54g and 65c) for clarification on these FFCRA-related issues, including the special circumstances that would require a W2-c Corrected Wage and Tax Statement form to be furnished to an employee. 

The American Rescue Plan Act of 2021 (ARP) extended tax credits for employers who continued to offer voluntarily FFCRA leave from April 1, 2021, to Sept. 30, 2021. For information about the tax credits that may be claimed under ARP for qualified leave wages, see Tax Credits for Paid Leave Under the American Rescue Plan Act of 2021 for Leave After March 31, 2021.