IRS Publishes Guidance on Reporting Qualified Sick & Family Leave Wages

Paul Ogawa
July 14, 2020

The IRS recently published Notice 2020-54, which details guidance for reporting qualified sick leave and family leave wages paid to employees under the Families First Coronavirus Response Act (“FFCRA”). The FFCRA and the ensuing reporting guidance applies to employers with fewer than 500 employees who provide paid leave due to circumstances related to COVID-19. Further, the Notice outlines the limits for payments under sections 7001 through 7005 of the FFCRA.

Generally, employers are required to report to employees the amount of qualified sick and family leave wages paid under Sections 7001 and 7003 of the FFCRA, and must distinguish between amounts paid under the Emergency Paid Sick Leave Act (“EPSLA”) and the Emergency Family and Medical Leave Expansion Act (“EFMLEA”). Employers must separately state each of these wage amounts either using Box 14 on Form W-2, or on a separate statement. Self-employed individuals claiming qualified sick or family leave must report these amounts on Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals.

If a separate statement is used to report the qualifying leave amounts, that separate statement must be provided in the same format it was filed to the IRS.

Employers may provide additional information regarding the qualifying leave payments under the FFCRA using model language provided in this Notice on either the W-2 or separate statement furnished to the employee. This model language includes the dollar amount limits associated with the wages, and information for self-employed filers required to file Form 7202.

To review this Notice in its entirety, please click here.

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Paul Ogawa

Paul Ogawa is a Senior Regulatory Counsel at Sovos Compliance. As part of the Regulatory Analysis team, his main areas of focus are state and federal tax withholding, the Affordable Care Act (ACA), and Canadian tax information reporting. Prior to Sovos, Paul worked as a litigation attorney in Boston area law firms, representing clients in insurance subrogation claims, family law matters, and employment disputes. Paul is a member of the Massachusetts Bar, earned his B.A. from Brandeis University and his J.D. from the Suffolk University Law School.
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