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IRS Issues Guidance for 2021 on Reporting Qualified Sick and Family Leave Wages

On September 7, 2021, the Treasury Department and the Internal Revenue Service (IRS) issued Notice 2021-53 (Notice), which provides guidance to employers about reporting on Form W-2 the amount of qualified sick and family leave wages paid to employees for leave taken in 2021. The notice provides guidance under recent legislation, including the Families First Coronavirus Response Act (FFCRA) which expired on September 30, 2021.

What are the Reporting Requirements?

Employers will be required to report these amounts to employees either on Form W-2, Box 14, or in a separate statement provided with the Form W-2.

According to the Notice, there are separate reporting requirements for leave provided from January 1, 2021, through March 31, 2021, and for leave provided from April 1, 2021, through September 30, 2021. The Notice gives additional specific reporting instructions for leave wages that must be entered on Box 1, 3 or 5 of Form W-2.

What was the Requirement for 2020?

In July 2020, the IRS issued Notice 2020-54, which provided guidance regarding W-2 reporting of qualified sick leave and family leave under FFCRA for wages paid to employees for leave taken in 2020.

Next Steps for Employers

Employers should work with their tax professional and/or payroll provider to ensure the required information is included on employees’ W-2s or provided via other acceptable means according to the IRS guidance.

Additional information about tax relief for employers affected by the COVID-19 pandemic is available from the IRS.

HR Works, Inc., headquartered at 200 WillowBrook Office Park in Fairport (Rochester), New York, with an office in East Syracuse, is a human resource management outsourcing and consulting firm serving clients throughout the United States. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.