At Wise, we are hearing from companies who either don’t think they can claim any payroll tax relief through the FFCRA and CARES Acts, or who are wondering if they should bother trying. Our tax team understands that it’s easy to feel overwhelmed because tracking payments and credits sounds like a lot of work on top of extra tasks created by the pandemic. The question is: can you afford to leave money on the table?

Identify your Credit Eligibility

Many companies are surprised when our Tax Consultants offer support to help them discover the numbers that they might be eligible to claim. You may not think that you are eligible for a significant amount, but if you are paying employees who are out sick with COVID or paying qualified family leave because of the virus, you may be due a substantial amount.

For example, if you paid FFCRA mandated sick or family leave up to the caps allowable, you can claim the wages paid and the corresponding employer Medicare amount as a credit. This can really add up, but you should track and claim these as soon as possible to get funds back into the business as these reconcile by quarter.

Remember the CARES Retention Credits

Even if you did not pay out any FFCRA sick or family leave pay, you may be eligible for CARES Retention credits. Our Tax Team advises, “if you paid employees who are not working, you can get back up to $5,000 per employee.” The legislation is complex and evolving, so getting expert advice makes sense. A recent development allows you to even get credits back for paying employee healthcare while they aren’t working.

“Helping clients determine if their payroll has eligible credits has become part of the normal payroll cycle,” says Ana Woods-Hill, CPP, a Wise Consulting Manager with Managed Payroll. “Businesses that have experienced less severe economic impact may not be aware that they can still claim some payroll tax relief through the CARES credit process. The IRS allows employers to claim credits if your employees are not working to full capacity, but you are paying them as though they are.”

Here are the Ways You Can Claim Your Payroll Tax Credits:

FFCRA – companies with less than 500 employees only:

• Configure system to remove employer Social Security tax on FFCRA payments
• Reduce payroll tax deposits in the payroll cycle

FFCRA & CARES Credits:

• Reduce payroll deposits at source via payroll vendor
• File Form 7200
• Adjust Form 941 at Quarter End

Get Payment & Credit Tracking and Reconciliation Help from Wise Consulting Today

Wise payroll professionals are keeping on top of all the new regulations and most recent changes so our clients don’t have to. If you have questions about the FFCRA & CARES Acts, the IRS Forms associated with the Acts or tracking payments and credits, reach out to Wise for a conversation. HCMHelp@WiseConsulting.com or 800-654-4550.