Does TurboTax take into account Tax Credits for Paid Leave Under the American Rescue Plan Act of 2021 for Leave After March 31, 2021?

Forum|Forum|4 years ago
January 23, 2022
2 replies
44 views

As per https://www.irs.gov/newsroom/tax-credits-for-[product key removed]-the-american-rescue-plan-act-of-2021-for-l[product key removed]-31-2021 it seems like employers get tax credits for paid leave between April 1 2021 and October 1, 2021, under the ARP Act of 2021. Does Turbo Tax take this into account when preparing Schedule H when filing 1040?

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Best answer by KrisD15

Thank you for this information. However, I am asking this from the perspective of a household employer. The relevant forms in this case are Schedule 3 (line 13h), Schedule H (Lines 8c, 8k, 8l, 8m, 8n) and Worksheet 4, links below:

Schedule 3: https://www.irs.gov/pub/irs-pdf/f1040s3.pdf
Schedule H: https://www.irs.gov/pub/irs-pdf/f1040sh.pdf
Worksheet 4 for Schedule H: https://www.irs.gov/instructions/i1040sh#en_US_2021_publink100079681

I appreciate the continued help and support from the community.

Thanks,

Yes,

TurboTax Home and Business and/or Self-Employed include Schedule H to report Household Employee tax and the Family/Sick Leave Credits may be reported there, however that form is also still being updated.

The program is still not separating the available credits for Quarter 1 versus Quarter 2 & 3.

RobertB4444

Level 15

Yes.

When you are entering the total wages paid for 2021 to your household employee into TurboTax this year a new box is located directly underneath the one for "Total Wages Subject to Social Security". The new box says "Qualified Sick and Family Wages Included Above". Enter any FFCRA wages paid there and the tax break is entered automatically.

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EA13Author

Level 2

Thanks for your reply! That gives me back some credit, but much less than the amount I put in for the "Qualified Sick and Family Wages Included Above" (only about 6.375% of the amount). In the next screen it asks for Qualified Sick and Family Wages made till April 1, 2021, and those lead to a more significant reduction in taxes. FFCRA covered Qualified Sick Wages till April 1, 2021, but the ARP extends it to Oct 1, 2021. If I paid some such wages after April 1 but before Oct 1, they should lead to a similar credit under ARP, as such wages before April 1 did under FFCRA.

When I work through the paper forms, I get the correct larger credit amount, but when I input it into TurboTax, I get a much lower amount.

So, it seems like FFCRA is taken into account by TurboTax, but can you /anyone shed light on if ARP specifically is taken into account?

Thanks!

KrisD15

Level 15

Yes.

That section in TurboTax is under construction, in fact, the IRS instructions for Form 7202 have not yet been completed.

TurboTax will support Form 7202.

As a Self-Employed Taxpayer, you will need to know any Wages paid by your employer for Tax Year 2020 and the first quarter of 2021 as well as any leave you claimed as a self-Employed Taxpayer in 2020 and what you will add (as Self-Employed credits) for Tax Year 2021 Quarter 1.

Then you will ALSO need to report what you are claiming for Tax Year 2021 Quarters 2 and 3.

This will be reported on Form 7202 as TWO time periods as well as TWO types of leave.

When you try to e-file at this time, on review your TurboTax program will tell you that Form 7202 is not ready and you will need to be patient and wait for that update.

Below is a link to the draft IRS copy of instructions.

IRS Form 7202 Instructions

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2061

Level 2

I see from prior replies that information from schedule H worksheet 4 (Credit for Qualified Sick and Family Leave Wages for Leave Taken After March 31, 2021) can be entered in Turbotax starting today, 3/17/22. However, when I'm in Turbotax I still only see and option to enter amoutns from Worksheet 3 (Credit for Qualified Sick and Family Leave Wages for Leave Taken Before April 1, 2021).

How do I get the credit for sick/family leave wages taken after March 31, 2021?

Thanks.