Payroll taxes are often a considerable source of frustration for employers, but this is especially true in the midst of a pandemic. A few options are available for relief, but these aren’t always worth pursuing. The wisdom of deferral, for example, depends on your ability to eventually cover owed payroll taxes.
The better you understand the current options for relief, the more prepared you’ll be to handle the complications of pandemic payroll taxes. Keep reading to learn more:
Sick Leave Tax Credits
When employees need to take time off to recover from COVID or care for family members with the disease, businesses can be left in a bind. The Families First Coronavirus Response Act (FFCRA) addresses this by fully covering the funds needed for federally mandated emergency leave.
This option is available for employers with fewer than 500 workers. Businesses must pay employees who request up to 80 hours of leave as they care for themselves or family members suffering from COVID.
Payroll Tax Deferrals
In addition to emergency assistance from the FFCRA, small businesses may be able to take advantage of tax opportunities included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This legislation provides the opportunity for businesses to defer tax liabilities for 2020.
Of course, with 2020 rapidly coming to an end, business owners who took advantage of the payroll tax deferral are wondering how they’ll proceed as the economy continues to stagnate in 2021. A lot may depend on how a future Biden administration handles this issue.
While President-elect Biden lacks the authority to grant forgiveness on his own, he could push for authorization from Congress. An extended repayment timeline may be easier to enact, however.
As you develop your strategy for dealing with payroll taxes during the pandemic, get in touch with the Highland Tax Group. We can help you develop a plan that will benefit both your business and your employees. Reach out today to get started.