New IRS guidance permits eligible employers who pay qualifying wages to retain an amount of the payroll taxes equal to the amount paid, rather than deposit them with the agency.
The guidance (Notice 2021-24) amplifies guidance issued in 2020 and provides for penalty relief under Sec. 6656 for an employer’s failure to timely deposit certain employment taxes with the IRS.
The relief applies to employers who pay qualified sick leave wages and qualified family leave wages as well as qualified health plan expenses allocable to the wages, under the Families First Coronavirus Response Act, as amended by the Consolidated Appropriations Act and the American Rescue Plan Act.
The notice also provides relief from Sec. 6656 for certain employers subject to a full or partial closure order due to COVID-19 or experiencing a decline in business. Learn more.