In an information release, the IRS has reminded employers that the next quarterly payroll tax return is due November 1, 2021. The IRS urges employers to file the returns electronically.
In addition, the IRS mentions that the credit for qualified sick and family leave wages has been extended and amended. The employer tax credits for qualified sick and family leave wages gives businesses with fewer than 500 employees funds to provide their employees with paid leave, either for the employee’s own health needs or to care for family members.
The American Rescue Plan of 2021 (ARPA) further amended and extended the tax credits (and the availability of advance payments of the tax credits) for paid sick and family leave. Notice 2021-24, 2021-18 IRB, has guidance on the ability to reduce deposits and request advances for the credits for periods of leave through Sept. 30, 2021. See IRS provides additional relief from failure to deposit penalties.
The employee retention credit (ERC) has also been extended and amended. The ERC is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees.
The modified and extended credit is available for qualified wages paid before January 1, 2022. Generally, the rules for the ERC for the second quarter of 2021 and the third and fourth quarters of 2021 are substantially similar. For more information about the ERC, see IRS provides extensive guidance on employee retention credit.
To continue your research on the employer credit for paid family and medical leave, see FTC 2d/FIN ¶L-17880 et seq. For the employee retention credit, see FTC 2d/FIN ¶ H-4687.5.
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