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2025 COVID 19 TAX CREDIT

2025 COVID-19 Tax Credit Update #

Overview #

This knowledge base article provides essential information about the 2025 update to the COVID-19 Tax Credit for qualified sick and family leave wages. It covers important changes, eligibility criteria, and instructions for claiming the credit using Form 941 or Form 944.

Key Updates #

  1. The COVID-19 related credit for qualified sick and family leave wages is limited to leave taken between March 31, 2020, and October 1, 2021.
  2. Employers paying qualified sick and family leave wages in 2025 for leave taken within the specified period are eligible to claim the credit in 2025.
  3. Form 941 has been updated with two new worksheets for reporting qualified sick and family leave wages paid in 2025 for leave taken in 2020 and 2021.

Eligibility Criteria #

To be eligible for the 2025 COVID-19 Tax Credit:

  • Employers must have paid qualified sick and family leave wages in 2025.
  • The wages must be for leave taken between March 31, 2020, and October 1, 2021.

Claiming the Credit #

Using Form 941 #

  1. Access the March 2025 revision of the Instructions for Form 941.
  2. Print the applicable worksheets before printing the 941 form.
  3. Complete the new worksheets for reporting qualified sick and family leave wages paid in 2025 for leave taken in 2020 and 2021.
  4. Follow the instructions to accurately report the credit on Form 941.

Using Form 944 #

  1. Refer to the 2025 Instructions for Form 944.
  2. Follow the provided guidelines to claim the credit for qualified sick and family leave wages paid in 2025.

Troubleshooting #

If you encounter issues while claiming the credit or completing the forms:

  1. Double-check that the leave dates fall within the eligible period (March 31, 2020 – October 1, 2021).
  2. Ensure you are using the correct version of Form 941 (March 2025 revision) or Form 944 (2025 version).
  3. Verify that you have printed and completed the new worksheets for Form 941 before filling out the main form.

Additional Resources #

For more information or assistance:

  • Access the help menu in the ProPay payroll software.
  • Visit our website at https://www.Paysoft.com for additional support resources.

Feedback #

We value your input! If you have suggestions for improving this knowledge base article or encounter any issues not addressed here, please contact our support team through the ProPay software help menu or our website.