The IRS recently published new guidance on tax credits available for paid sick and family leave under the American Rescue Plan Act (ARPA) of 2021.
The ARPA, enacted last March, amended and extended the tax credits available to eligible employers that provide paid sick and family leave under the Families First Coronavirus Response Act of 2020.
An updated FAQ from the IRS clarifies whether an eligible employer that claims the tax credits for qualified leave wages paid after Dec. 31, 2021, for leave taken by an employee in 2021 needs to furnish the employee a Form W-2c to correct the amount of sick and family leave wages reported in Box 14 of their 2021 Form W-2. The answer is yes, according to questions 54g and 65c of the updated FAQ.