Thomson Reuters has launched a new tool that may be used to determine if an employer is eligible to take a tax credit for providing qualified leave wages for coronavirus (COVID-19) related reasons.
Under the Families First Coronavirus Response Act (FFCRA), certain employers were required to provide paid leave to workers who were unable to work or telework due to circumstances related to COVID-19 (Qualified Paid Leave). FFCRA offsets the costs of providing Qualified Paid Leave, up to certain amounts, with refundable tax credits against employment taxes for qualified leave wages taken beginning April 1, 2020 and ending December 31, 2020. See regarding refundable tax credits.
Paid sick and family leave
The paid sick and family leave credits, which previously were available only until the end of 2020 through the FFCRA, have been extended for periods of leave taken through March 31, 2021 by the Consolidated Appropriations Act, 2021 (CAA, 2021). Eligible employers, those with fewer than 500 employees, may claim credit for paid sick leave and/or paid family leave for certain COVID-19 related reasons. The requirement to provide paid leave was not extended therefore the tax credits are available through March 31, 2021 for employers who provide qualified leave wages voluntarily.
New Thomson Reuters COVID-19 Paid Leave Tax Credit tool
The new COVID-19 Paid Leave Tax Credit Tool is free to use and asks a series of questions designed to determine whether an employer may be eligible to claim a tax credit for providing COVID-19 emergency paid sick leave and/or expanded family leave. The tool provides a brief overview summarizing the available tax credit and the recent extension. Next, the tool walks the user through a series of Yes/No questions to determine if they are eligible to claim a credit for providing qualified leave wages in the first quarter of 2021. It outlines the types of leave that qualify for the tax credit and also provides the maximum amounts of qualified leave wages eligible for the credit. Finally, the tool explains how the credits may be claimed.
After an employer proceeds through the steps, the tool provides a report for review and a handy link to Thomson Reuter’s Employee Retention Credit Eligibility Tool. The tool also features a number of resources including a link to our COVID-19 Special Study of Benefits and Payroll Considerations, a link for Checkpoint Edge non-subscribers to obtain a free trial of Checkpoint Edge and gain access to the COVID-19 Special Study, and a link to the IRS webpage on Employer Tax Credits. The tool may be used as many times as needed.