FFCRA wages subject to 401(k) withholding?

[BG5150]

Are FFCRA wages subject to 401(k) withholding?  And the subsequent match responsibility?

[Larry Starr]

53 minutes ago, BG5150 said:

Are FFCRA wages subject to 401(k) withholding?  And the subsequent match responsibility?

Why wouldn't they be?  Do you see something that would avoid treatment as any other employer payment?

[Bill Sweetnam]

In a series of questions and answers regarding FFRCA payment, the IRS said this:

“The FFCRA does not distinguish qualified leave wages from other wages an employee may receive from the employee’s standpoint as a taxpayer; thus, the same rules that generally apply to an employee’s regular wages (or compensation, for RRTA purposes) would apply from the employee’s standpoint.  To the extent that an employee has a salary reduction agreement in place with the Eligible Employer, the FFCRA does not include any provisions that explicitly prohibit taking salary reduction contributions for any plan from qualified sick leave wages or qualified family leave wages.”

 

Here is the link to the Q&As:  https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs

Bill Sweetnam

[Larry Starr]

17 hours ago, Bill Sweetnam said:

In a series of questions and answers regarding FFRCA payment, the IRS said this:

“The FFCRA does not distinguish qualified leave wages from other wages an employee may receive from the employee’s standpoint as a taxpayer; thus, the same rules that generally apply to an employee’s regular wages (or compensation, for RRTA purposes) would apply from the employee’s standpoint.  To the extent that an employee has a salary reduction agreement in place with the Eligible Employer, the FFCRA does not include any provisions that explicitly prohibit taking salary reduction contributions for any plan from qualified sick leave wages or qualified family leave wages.”

 

 

Here is the link to the Q&As:  https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs

Bill Sweetnam

Thanks Bill.  Good to see you on here.