The IRS issued information regarding the letters taxpayers will receive when the IRS has made a math adjustment to a request for a refund filed on a Form 7200, Advance Payment of Employer Credits Due to COVID-19, has rejected the claim or needs verification of the business’ address before processing the claim in IR-2020-158.[1]

Under the sick pay provisions enacted as part of the Families First Coronavirus Relief Act (FFCRA), a self-employed individual can qualify for a refundable tax credit if the self-employed individual meets the tests to qualify for such relief. However, such relief is reduced to the extent the self-employed person receives qualified sick pay as an employee.

Obviously, the IRS will need information on such sick pay on a per employee basis in order to apply this rule. As well, employees likely will also not have a record of such pay. So in Notice 2020-54[1] the IRS has provided that employers will provide such information on Form W-2 for 2020.

The Notice provides:

In order to provide self-employed individuals who also receive wages or compensation as employees with the information they need to properly claim any qualified sick leave equivalent or qualified family leave equivalent credits for which they are eligible, this notice requires employers to report to employees the amount of qualified sick leave wages and qualified family leave wages paid to the employees under sections 7001 or 7003 of the Families First Act, respectively.[2]