IRS Updates FAQs for EPSL and EFML Tax Credits

The IRS has announced updates to the overview and FAQs for the FFCRA emergency paid leave tax credits.  The updates will be relevant to employers that voluntarily extend such leaves through March 31, 2021.

Thankfully the updates appear to be focused solely on amending the dates that credits can be claimed.  The rules from last year appear to just be carrying forward to the first quarter of 2021 for qualifying employers.  The one FAQ that may be most relevant to note is #48, which clarifies the FFCRA emergency paid leave tax credits are available on qualified leave wages paid through March 31, 2021, even if the actual payment of those wages will occur in April.

We’re more anxious to see updates to the IRS guidance on the Employee Retention Credit (ERC), as it changed pretty significantly for the first two quarters of 2021 and applied one retroactive change to 2020 for employers that took a PPP loan to no longer be disqualified for claiming the ERC in 2020.  Those FAQs are not yet updated as of the date the EPSL/EFML FAQs were updated.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

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