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Employment Alert: 
IRS Issues Guidance for Employers 
Reporting  Emergency Paid Leave Wages
July 31, 2020
 
The Internal Revenue Service (IRS) recently issued guidance for employers addressing the reporting of qualified sick leave wages and qualified family leave wages paid to employees under the Families First Coronavirus Response Act (FFCRA). The FFCRA generally requires employers with fewer than 500 employees to provide paid leave due to certain circumstances related to COVID-19 through two separate provisions: the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act.
 
The IRS guidance, Notice 2020-54, states that employers will be required to report FFCRA leave compensation on either the employee's W-2, Box 14, or on a separate tax statement. If a separate statement is provided and the employee receives a paper W-2, then the statement must be included with the W-2 provided to the employee. If the employee receives an electronic W-2, then the statement must be provided in the same manner and at the same time as the electronic W-2.
 
Paid Sick Leave
 
Emergency paid sick leave wages paid to the employee should be included as taxable wages on a W-2 form in Box 1 (wages, tips and other compensation), Box 3 (Social Security wages) and Box 5 (Medicare wages and tips).
 
Additionally, in Box 14 of the W-2, sick leave on account of the employee's own illness or isolation due to COVID-19 must be labeled as "sick leave subject to $511 per day limit," or use similar language. Sick leave used for caring for another individual, including a minor child, must use the following, or similar, language: "sick leave subject to $200 per day limit."
 
Emergency FMLA
 
Like sick leave, emergency family and medical leave wages paid to the employee should be included as taxable wages on a W-2 form in Boxes 1, 3, and 5. In Box 14, the W-2 must identify the emergency family and medical leave as "emergency family leave wages," or use similar language.
 
Conclusion
 
Employers subject to the FFCRA paid leave requirements (those with fewer than 500 employees) should ensure that this paid leave is reported on the 2020 W-2 or in a statement included with the W-2.
 
Please reach out to the FWW Employment team with your questions about FFCRA paid leave or reporting requirements. For more information and resources, check out the FWW COVID-19 resource page here.


  
Kelly Tilden    focuses her practice in the areas of employment  law, business, and litigation. She advises clients regarding the hiring, discipline and termination of employees, compliance with state and federal civil rights, wage and hour laws, and leave laws. Kelly offers practical guidance and experienced-based insight to help employers confidently apply state and federal regulations. She has been s elected by her peers for inclusion in the  Best Lawyers in America ®  2018-2020 for Employment Law - Management.

Contact Kelly at 503.228.6044 or  ktilden@fwwlaw.com

Kim McGair ' practice emphasizes a wide range of litigation matters including employment, commercial litigation, commercial collections, personal injury defense, and real estate litigation. She is an advocate for her clients and provides them with sensible advice and strong representation to protect their interests and help them achieve their objectives as efficiently as possible. Kim was selected by her peers for inclusion in the Best Lawyers in America® 2018-2020 for Commercial Litigation and to the Oregon Super Lawyers list 2019-2020 for Commercial Litigation.

Contact Kim at 503.228.6044 or  kmcgair@fwwlaw.com


Trish Walsh  focuses her practice in the areas of litigation and employment law, protecting clients' interests inside and outside the courtroom. In her employment practice, Trish drafts, audits and updates policy handbooks and provides advice on employment issues under Oregon, Washington and federal laws.

Contact Trish at 503.228.6044 or  twalsh@fwwlaw.com




Jon Himes  practices in several areas including litigation, employment, and financial services, enabling him to assist clients with a full-range of legal and business challenges. His employment practice focuses on employment litigation and wage and hour laws. 

Contact Jon at 503.228.6044 or  jhimes@fwwlaw.com

 

 

     

 

 

Copyright © 2020 Farleigh Wada Witt. All Rights Reserved.

 

The contents of this publication are intended for general information only and should not be construed as legal advice or opinion on specific facts and circumstances.

 

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