Farm (Ranch) Loss Carrybacks
IRS Released Draft Form 941-X

Tax Credits Extended for Paid Leave

The Families First Coronavirus Response Act included Code Sections 3131 and 3132 that provided employers and self-employed individuals with fewer than 500 employees refundable credits rather than mere deduction for the compensation paid to employees for “emergency paid sick leave” and “emergency family and medical leave.” In order to qualify for these benefits, the payment had to be related to the COVID-19 pandemic. Although the availability of the credits and tax-free income initially expired on March 31, 2021, the American Rescue Plan Act of 2021 has now extended the availability of these benefits for COVID-19 emergency wages paid from April 1, 2021, through Sept. 30, 2021.

An alternative that might be considered is for the employee to agree to have his/her COVID-19 emergency wages contributed to a 170(c) charitable organization. Notice 2021-42 that is effective through Dec. 31, 2021, provides that the employee does not report the income but also does not receive a charitable deduction while the employer receives the refundable credit for the amount contributed.

Employer tax credits for employee paid leave due to COVID-19

IRS extends tax relief for employer leave-based donation programs that aid victims of the COVID-19 pandemic

Tax Credits for Paid Leave Under the American Rescue Plan Act of 2021 for Leave After March 31, 2021

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