The IRS issued two sets of FAQs on Friday meant to help families and employers claim two tax benefits, following changes in the latest pandemic relief law.
The March relief law (Public Law 117-2) made more individuals eligible for the Child and Dependent Care Tax Credit by increasing the amount of work-related expenses taken into account and the percentage of allowed work-related expenses. The law also made the credit refundable.
- In FAQs for the credit, the IRS answered a question on the percentage of work-related expenses allowed for the credit, saying it depends on income. The maximum percentage allowed is 50%.
- The IRS also on Friday issued FAQs for the credits employers can claim for offering paid sick and family leave, according to the March relief law. Eligible employers can claim the paid sick and family leave tax credit until Sept. 30.
- Employers are entitled to the tax credits if their employees are under quarantine or isolation related to Covid-19, experiencing symptoms or awaiting test results, the IRS said.
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