What are Qualified Sick Leave Wages?
351 views | Last modified 4/25/2023 2:02:49 AM EST | Added by TaxBandits Team

Applicable To
94X 1099 W-2 ACA W-4

Qualified sick leave wages refer to the wages paid to employees who are unable to work or telework because they are experiencing COVID-19 related symptoms, are subject to a quarantine or isolation order, have been advised by a healthcare provider to self-quarantine, or are caring for someone who is subject to such an order or has been advised to self-quarantine.

Under the Families First Coronavirus Response Act (FFCRA), eligible employers can receive tax credits for the qualified sick leave wages paid to employees. When reporting these wages on Form 941, show the total qualified sick wages paid under the FFCRA. These wages are not subject to the employer portion of the Social Security tax. Accordingly, in Column 2 show only 6.2% of the amount in Column 1.

The refundable credit for qualified sick wages is reported on line 13c, and qualified health plan expenses for these employees are reported on line 19.

For the 2023 tax year, Qualified sick leave wages paid for leave taken after March 31, 2020, and before April 1, 2021, aren't subject to the employer's share of social security tax; therefore, the tax rate on these wages is 6.2%. The social security wage base limit is $160,200.

The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2022. There is no wage base limit for Medicare tax.

Social security and Medicare taxes apply to the wages of household workers you pay $2,600 or more in cash wages in 2023. Social security and Medicare taxes apply to election workers who are paid $2,200 or more in cash or an equivalent form of compensation in 2023.

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