We’ve received several questions on the availability of the new payroll tax credits/deferral for taxpayers that are participating in the new PPP loan program. See below for summary info:
Payroll Tax Credits
- Not available to businesses that participate in the PPP loan program.
- Allows credit against payroll taxes for up to 50% of the first $10,000 wages for employees that are not working. Small employers under 100 EEs can use other metric. Use Form 7200.
Delay of Payment of Employer Payroll Taxes (Deferral)
- Not available to businesses that participate in the PPP loan program. Technically, only not available to business that receive loan forgiveness in the PPP loan program, but all that participate are expected to have forgiveness.
- Delays payment of 50% of employer’s 2020 payroll taxes until 12/31/21 and the remaining 50% to 12/31/22.
Sick Leave Payroll Credits
- Business claims a credit against payroll taxes for sick leave and family leave paid under recently passed legislation. Leave paid in excess of payroll taxes is refundable. Use Form 7200.
- Available to businesses that participate in PPP loan program. However, sick leave and family leave wages do not count towards PPP loan and cannot be paid with PPP loan.