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IRS Releases Updated FAQs on Tax Credits for Leave Under FFCRA and ARPA

As previously reported by HR Works, the IRS previously issued a comprehensive list of FAQs about tax credits under the Families First Coronavirus Response Act (FFCRA) and the American Rescue Plan Act (ARPA). On March 3, 2022, the IRS released updated guidance, Fact Sheet 2022-16 and Fact Sheet 2022-15, concerning employee and employer reporting of wages for leave taken under the FFCRA and ARPA during different periods.

Regarding leave associated with the FFCRA, Fact Sheet 2022-16 adds two FAQs surrounding any leave taken specifically before April 1, 2021. These FAQs:

  • FAQ 54g: Addresses when employers claiming tax credits for wages paid after 2021 for leave taken during the period of April 1, 2020 – March 31, 2021,and providing employees a Form W-2c to correct wages reported on the employee’s 2020 or 2021 Form W-2.
  • FAQ 65c: Advises when a self-employed individual in receipt of a Form W-2c from their employer must file an amended tax return.

For leaves under the ARPA, Fact Sheet 2022-15 incorporates two additional FAQs regarding time taken away from work after March 31, 2021. The FAQs consist of:

  • FAQ 98a: Addresses when an employer claiming tax credits for wages paid after 2021 for leave taken from April 1- Sept. 30, 2021, must provide employees a Form W-2c to correct the wages on the employee’s 2021 Form W-2.
  • FAQ 116a: Advises when a self-employed individual in receipt of a Form W-2c for this period must file an amended tax return.

Next Steps for Employers

With the release of these updated fact sheets, it is recommended that employers review the guidance and consult with their tax professional for additional information on claiming the credits.

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.