Impact of Recent COVID-19 Legislation on Employment Taxes

 

The Families First Coronavirus Response Act (the "FFCRA"), enacted on March 18, 2020, provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19. The credit for qualified sick and family leave wages will be claimed on your employment tax return (Form 941, Form 943, Form 944, or Form CT-1). For more information, go to IRS.gov/plc.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, is designed to encourage eligible employers to keep employees on their payroll, despite experiencing economic hardship related to COVID-19, with an employee retention tax credit. The employee retention credit will be claimed on your employment tax return (Form 941, Form 943, Form 944, or Form CT-1). For more information, go to IRS.gov/erc.

The CARES Act also allows employers to defer the deposit and payment of the employer share of social security taxes (Tier 1 employer tax for railroad employers) The deferred amount will be reported on your employment tax return (Form 941, Form 943, Form 944, or Form CT-1). For more information, go to IRS.gov/etd.

For additional information on COVID-19 related tax relief, including news releases, frequently asked questions, and guidance published in the Internal Revenue Bulletin, go to IRS.gov/covid19guidance.