Guidance from the IRS and Treasury

Many workers have qualified to receive paid leave during the pandemic under the Families First Coronavirus Response Act (FFCRA). This Act requires certain employers with fewer than 500 employees to provide paid sick leave or paid expanded family and medical leave to those who meet specific criteria related to COVID-19.¹ Earlier this month, the Treasury Department and the Internal Revenue Service released Notice 2020-54 providing guidance for employers on the requirement to report the amount of those wages paid. Employers report these amounts on Form W-2 or on a separate statement.

Details

The ten-page Notice gives details on these topics:

• Requirements for employee eligibility
• Employer responsibilities
• Possible tax credits for employers who provide COVID-19-related paid leave
• Information for self-employed individuals who are also employees
• Reporting requirements
• Model language for use in employee instructions

For Sage HRMS/Abra users

We have updated our guidelines that Sage Abra Suite and Sage HRMS administrators can use to set up their system to address the Families First Coronavirus Response Act. You can find links to these guidelines on our blog.

Sources:

1. Families First Coronavirus Response Act: Employer Paid Leave Requirements
2. Notice 2020-54

Additional information

Families First Coronavirus Response Act: Questions and Answers

New Employer Tax Credits