What are Qualified Family Leave Wages?
271 views | Last modified 4/25/2023 2:16:48 AM EST | Added by TaxBandits Team

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

Qualified family leave wages refer to the wages paid to employees who are unable to work or telework because they need to care for a child whose school or place of care is closed or unavailable due to COVID-19-related reasons.

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

The refundable credit for qualified family leave wages is reported on line 13c, and qualified health plan expenses for these employees are reported on line 20.

It is important to note that employers that pay qualified sick and family leave wages in 2023 for leave taken after March 31, 2020, and before October 1, 2021, are eligible to claim a credit for qualified sick and family leave wages in the quarter of 2023 in which the qualified wages were paid.

The first ten days for which an employee takes leave is not covered under the qualified family leave wages and may be unpaid. However, during those ten days, an employee may be entitled to receive qualified sick leave wages as provided under the ESPLA or may receive other forms of paid leave, such as accrued sick leave, annual leave, or other paid time off under the eligible employer’s policy. 

Only after the employee takes leave for ten days can the eligible employer provide the employee with qualified family leave wages for up to ten weeks. They are required to pay an amount equal to at least two-thirds of the employee’s regular rate of pay, multiplied by the number of hours the employee otherwise would have been scheduled to work, not to exceed $200 per day and $10,000 in the aggregate for the calendar year.

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