IRS Offers Virus Relief On Employment Tax Penalties

The Internal Revenue Service said Tuesday that employers receiving tax credits for providing paid coronavirus leave to employees won't be penalized for failing to remit employment taxes that would be offset by the credits.

Employers who pay sick and family leave, as provided for by a recently enacted law, won't be liable for Internal Revenue Code Section 6656 penalties for failing to deposit employment taxes, the IRS said in a notice. The agency will waive the penalties for amounts that will be offset by tax credits provided by the legislation, according to the notice.

The Families First Coronavirus Response Act provides refundable tax credits to compensate for paid family and paid sick leave under the legislation, according to the notice. The Coronavirus Aid, Relief and Economic Security Act , signed by President Donald Trump on Friday, also offers tax credits to businesses that are partly or fully shut down because of the pandemic but continue to pay wages and health care expenses. 

--Editing by Neil Cohen.

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