Treasury, IRS issue guidance for 2021 on reporting qualified sick and family leave wages

The IRS published Notice 2021-53: Guidance on Reporting Qualified Sick Leave Wages and Qualified Family Leave Wages Paid For Leave Provided in 2021.

The Notice provides guidance for employers who are required to report qualified leave wages in box 14 of the 2021 Form W-2 or another similar statement accompanying an employee’s Form W-2. However, eligible employers who have decided to forego claiming refundable tax credits are not required to separately report qualified sick leave wages or qualified family leave wages paid to employees to the extent those wages are not claimed as a credit. Similarly, governmental employers who are prohibited from claiming credits for qualified leave wages are not required to  separately report any qualified sick leave wages or qualified family leave wages paid to employees.

The Notice provides guidance for self-employed individuals in calculating and claiming the amount of any sick and family leave equivalent credits that may be available to them in their self-employed capacities.    

The Notice also provides model language for the Instructions for Employees for the Form W-2,  explaining that qualified leave wages may limit the amount of the qualified sick and family leave equivalent credits to which the employee may be entitled with respect to any self-employment income.

Disclaimer: The information contained herein is not intended to be construed as legal advice, nor should it be relied on as such. Employers should closely monitor the rules and regulations specific to their jurisdiction(s) and should seek advice from counsel relative to their rights and responsibilities.

Megan Butz

By Megan Butz
General Counsel, HR Compliance, Checkwriters
Megan joined Checkwriters in 2020 and is responsible for reviewing, revising, and implementing internal policies of the company, advising on human resource, employment, and labor matters, and monitoring and publishing state and federal legal updates to the Checkwriters News and Compliance Center for distribution to thousands of clients around the country. Before joining Checkwriters, Megan served as a judicial law clerk for the justices of the Massachusetts Probate and Family Court performing legal research and writing, followed by private practice in Cape Cod.

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