The tax year 2021 W-2 reporting is only required for the W-2 issued to the employee. Because this information is reported in Box 14, most of us are aware that Box 14 information is not included in the e-file submitted to the SSA/BSO or the IRS. The IRS Notice 2021-53 provides detailed information.
If you paid your employee Qualified Sick and/or Family Leave wages under the FFCRA, as amended by the COVID-related Tax Relief Act of 2020, during the period January 1, 2021, through March 31, 2021, or the American Recue Plan Act of 2021 during the period April 1, 2021, through September 30,2021 AND requested refund of the said qualified wages, you will be required to provide this information to your employee either in Box 14 of their W-2 for tax year 2021 or on a separate statement.
Just as we had to report this information in tax year 2020, the same requirements exist for tax year 2021.
To review:
- Period January 1, 2021 through March 31, 2021
- Qualified sick leave wages that met the requirements of the Emergency Paid Sick Leave Act (EPSLA)
- At the rate of $511/day at a maximum of $5,110 in total (4/1/2020 – 3/31/2021)
- Subject to Federal, State, or local COVID-19 quarantine or isolation order.
- A health care provider advised a self-quarantine due to COVID-19.
- Employee is experiencing symptoms of COVID-19 or seeking a medical diagnosis.
- At the rate of $200/day (at 67% of wage rate) at a maximum of $2,000 in total (4/1/2020 – 3/31/2021)
- Caring for someone subject to a COVID-19 quarantine or self-isolation order.
- Caring for a son or daughter because school or childcare is not available due to COVID-19.
- Employee is experiencing a substantially similar condition specified by the Secretary of Health and Human Services
- Qualified Family and Medical Leave wages that met the requirements of the Emergency Family and Medical Leave Expansion Act (EFMLEA)
- At the rate of $200/day at a maximum of $10,000 in total (4/1/2020 – 3/31/2021)
- Additional 10 weeks to care for a son or daughter because of school or childcare is not available due to COVID-19.
- Can include:
- Qualified Wages – listed on Line 5a(i) or (ii), Form 941
- Qualified Wages – listed on Line 5c (that exceeded the SS wage limit), Form 941
- Qualified allocated healthcare costs
- Employer’s share of Medicare tax on wages on A and B above
- Period April 1, 2021 through September 30, 2021
- Qualified sick leave wages that met the requirements of the Emergency Paid Sick Leave Act (EPSLA)
- At the rate of $511/day at a maximum of $5,110 in total (4/1/2021 – 9/30/2021)
- Subject to Federal, State, or local COVID-19 quarantine or isolation order.
- A health care provider advised a self-quarantine due to COVID-19.
- Employee is experiencing symptoms of COVID-19 or seeking a medical diagnosis.
- At the rate of $200/day (at 2/3rds of regular rate of pay) at a maximum of $2,000 in total (4/1/2021 – 9/30/2021)
- Caring for a son or daughter because school or childcare is not available due to COVID-19.
- Employee is experiencing a substantially similar condition specified by the Secretary of Health and Human Services
- Caring for someone subject to a COVID-19 quarantine or self-isolation order.
- For additional and updated information see the IRS webpage.
- Qualified Family and Medical Leave wages that met the requirements of the Emergency Family and Medical Leave Expansion Act (EFMLEA)
- At the rate of $200/day (at 2/3rds of regular rate of pay) at a maximum of $10,000 in total (4/1/2021 – 9/30/2021)
- Additional 10 weeks to care for a son or daughter because of school or childcare is not available due to COVID-19.
- The employee is obtaining a COVID-19 vaccination
- The worker is recovering from an injury, disability, illness or condition related to a vaccination
- The employee is seeking or awaiting the results of a COVID-19 test or diagnosis because either the employee has been exposed to COVID-19 or the employer requested the test or diagnosis.
- For additional and updated information see the IRS webpage.
- Can include:
- Qualified Wages – listed on Line 5a(i) or (ii), Form 941
- Qualified Wages – listed on Line 5c (that exceeded the SS wage limit), Form 941
- Qualified allocated healthcare costs
- Employer’s share of Medicare tax on wages on A and B above
- Employer’s share of Social Security tax on wages on A and B above
- An Example:
- Included in Box 14, if applicable, are amounts paid to you as qualified sick leave wages or qualified family leave wages under the Families First Coronavirus Response Act and/or sections 3131 and 3132 of the Internal Revenue Code. Specifically, up to six types of paid qualified sick leave wages or qualified family leave wages may be reported in Box 14:
Sick Leave Wages subject to $511/day limit paid for leave taken after December 31, 2020 and before April 1, 2021$Sick Leave Wages subject to $200/day limit for leave paid for leave taken after December 31, 2020 and before April 1, 2021$Emergency Family Leave Wages paid for leave taken after December 31, 2020 and before April 1, 2021$Sick Leave Wages subject to $511/day limit paid for leave taken after March 31, 2021 and before October 1, 2021$Sick Leave Wages subject to $200/day limit for leave paid for leave taken after March 31, 2021 and before October 1, 2021$Emergency Family Leave Wages paid for leave taken after March 31, 2021 and before October 1, 2021$
Year-end tax filings are near, Greenshades offers a suite of payroll and tax compliance services. Contact us to learn more about how Greenshades can simplify and enhance payroll, taxes, HR, compliance, and so much more.
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