How to determine the amount of leave wages for which an eligible employer may receive credit?
330 views | Last modified 4/25/2023 2:39:41 AM EST | Added by TaxBandits Team

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

Whether it is the qualified sick leave wages or the qualified family leave wages, an eligible employer may receive credit equal to 100% of: 

  •  Qualified leave wages it pays its employees.
  •  Qualified health plan expenses (to provide and maintain a group health plan) allocable to those wages.
  •  Employer’s share of Medicare tax on the qualified leave wages.  

Now, for qualified sick leave wages, the rate of payment is determined as follows:

  •  If an employee is unable to work or telework due to his or her own health needs for reasons related to COVID-19, an employee is entitled to be paid at their regular rate of pay, or, if higher, the federal minimum wage or any applicable state or local minimum wage, up to $511 per day and $5,110 in the aggregate.
  •  If an employee is unable to work or telework because he or she needs to care for others for reasons related to COVID-19, an employee is entitled to be paid at two-thirds their regular rate of pay or, if higher, the federal minimum wage or any applicable state or local minimum wage, up to $200 per day and $2,000 in the aggregate. 

Likewise, for qualified family leave wages, an eligible employer is 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 $2,000 in the aggregate for the calendar year. 

You can also use Worksheet 1 to determine the Credit for Qualified Sick and Family Leave Wages Paid this Quarter of 2023 for Leave Taken After March 31, 2020, and Before April 1, 2021, and Worksheet 2 to determine the Credit for Qualified Sick and Family Leave Wages Paid This Quarter of 2023 for Leave Taken After March 31, 2021, and Before October 1, 2021.

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