Form W-2, box 14: IRS says to include this for TY 2021

Let your Payroll team know: IRS has specified what information they’ll need to include in box 14 of the TY 2021 Form W-2.

In Notice 2021-53, the Service said certain wages must be reported in box 14 or in a separate statement included with Form W-2.

Which wages? Qualified paid sick and family leave provided for reasons related to COVID-19 under two laws:

• Families First Coronavirus Response Act (FFCRA), as amended – this extended the availability of tax credits, for employers providing paid leave, beyond 2020 (through Q1 of 2021), and
• American Rescue Plan Act (ARPA) – this not only further extended the availability of tax credits (through Q2 and Q3 of 2021) but also expanded the reasons employees could take paid leave (e.g., to receive a COVID-19 vaccine).

Model language on paid leave

The info in box 14 is for the sake of employees who may be self-employed as well. Under the FFCRA and the ARPA, they can claim tax credits for themselves, but only after taking into account any qualified leave wages reported in box 14 of Form W-2.

That explains why sick and family leave wages don’t have to be reported in box 14 if an employer forgoes claiming the tax credits.

As Payroll prepares to meet the Jan. 31, 2022 deadline to send TY 2021 W-2s to employees and file the forms with SSA, model language from IRS may help. IRS has provided six options you may choose to use in box 14 of Form W-2 or your separate statement.

They are:

• Sick leave wages subject to the $511 per day limit paid for leave taken after Dec. 31, 2020, and before April 1, 2021, because of care you required.
• Sick leave wages subject to the $200 per day limit paid for leave taken after Dec. 31, 2020, and before April 1, 2021, because of care you provided to another.
• Emergency family leave wages paid for leave taken after Dec. 31, 2020, and before April 1, 2021.
• Sick leave wages subject to the $511 per day limit paid for leave taken after March 31, 2021, and before Oct. 1, 2021, because of care you required.
• Sick leave wages subject to the $200 per day limit paid for leave taken after March 31, 2021, and before Oct. 1, 2021, because of care you provided to another.
• Emergency family leave wages paid for leave taken after March 31, 2021, and before Oct. 1, 2021.