Payroll_Tax_Credit_for_COVID_19_Sick_and_Family_Leave

Payroll Tax Credit for COVID-19 Sick and Family Leave

The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, made a number of changes to the employee retention tax credits previously made available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including modifying and extending the Employee Retention Credit (ERC), for six months through June 30, 2021. Several of the changes apply only to 2021, while others apply to both 2020 and 2021.

As a result of the new legislation, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after December 31, 2020, through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum ERC amount available is $7,000 per employee per calendar quarter, for a total of $14,000 in 2021. (www.irs.gov, Jan 26, 2021) 


IRS updates

New law extends COVID tax credit for employers who keep workers on payroll, Jan 26, 2021

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Related topics

How do I update my Social Security pay code and employee pay codes for Social Security?

How will the Payroll Executive Order affect the 2020 Payroll Year-end Checklist?

 

 

 

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