Page 255 - BusinessStructures & Forms

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Fileid: … tions/i943/2022/a/xml/cycle07/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
payroll tax credit may be carried forward to the first Example. Maple Co. is a monthly schedule depositor
quarter of the succeeding calendar year as a payroll tax that pays employees every Friday. In 2022, Maple Co.
credit against the employer share of social security tax on had pay dates every Friday of 2022 starting January 7,
wages paid in that quarter. 2022. Maple Co. paid qualified sick and family leave
Example. Rose Co. is an employer with a calendar tax wages on March 11 and March 18 for leave taken after
year that filed its timely income tax return on April 15, March 31, 2020, and before April 1, 2021. The
2022. Rose Co. elected to take the qualified small nonrefundable portion of the credit for qualified sick and
business payroll tax credit for increasing research family leave wages for the year is $1,000. On line 17,
activities on Form 6765. The third quarter of 2022 is the Maple Co. will use the $1,000 to reduce the liability for the
first quarter that begins after Rose Co. filed the income tax January 7 pay date, but not below zero. If any
return making the payroll tax credit election. Therefore, nonrefundable portion of the credit remains, Maple Co.
the payroll tax credit applies against Rose Co.’s share of applies it to the liability for the January 14 pay date, then
social security tax on wages paid to employees in the third the January 21 pay date, and so forth until the entire
quarter of 2022. Rose Co. is a semiweekly schedule $1,000 is used.
depositor. Rose Co. completes Form 943‐A by reducing Nonrefundable portion of credit for qualified sick
the amount of liability entered for the first payroll payment and family leave wages for leave taken after March
in the third quarter of 2022 that includes wages subject to 31, 2021, and before October 1, 2021 (line 12d). The
social security tax by the lesser of (1) its share of social nonrefundable portion of the credit for qualified sick and
security tax on the wages, or (2) the available payroll tax family leave wages paid in 2022 for leave taken after
credit. If the payroll tax credit elected is more than Rose March 31, 2021, and before October 1, 2021, is limited to
Co.’s share of social security tax on the first payroll the employer share of Medicare tax on wages paid during
payment of the quarter, the excess payroll tax credit the year. In completing line 17 or Form 943-A, you take
would be carried forward to succeeding payroll payments into account the nonrefundable portion of the credit for
in the third quarter until it is used. If the amount of the qualified sick and family leave wages paid in 2022 against
payroll tax credit exceeds Rose Co.’s share of social the liability for the first payroll payment of the year, but not
security tax on wages paid to its employees in the third below zero. Then reduce the liability for each successive
quarter, the excess credit would be treated as a payroll payroll payment of the year until the nonrefundable portion
tax credit against its share of social security tax on wages of the credit is used. Any credit for qualified sick and
paid in the fourth quarter. If the amount of the payroll tax family leave wages for leave taken after March 31, 2021,
credit remaining exceeded Rose Co.’s share of social and before October 1, 2021, that is remaining at the end
security tax on wages paid in the fourth quarter, it could be of the year because it exceeds the employer share of
carried forward and treated as a payroll tax credit for the Medicare tax is claimed on line 14f as a refundable credit.
first quarter of 2023. The refundable portion of the credit doesn't reduce the
Nonrefundable portion of credit for qualified sick liability reported on line 17 or Form 943-A.
and family leave wages for leave taken after March Nonrefundable portion of COBRA premium
31, 2020, and before April 1, 2021 (line 12b). The assistance credit (line 12e). The nonrefundable portion
nonrefundable portion of the credit for qualified sick and of the COBRA premium assistance credit is limited to the
family leave wages paid in 2022 for leave taken after employer share of Medicare tax on wages paid during the
March 31, 2020, and before April 1, 2021, is limited to the year that is remaining after that share is first reduced by
employer share of social security tax on wages paid any credit claimed on Form 943, line 12d, for the
during the year that is remaining after that share is first nonrefundable portion of the credit for qualified sick and
reduced by any credit claimed on Form 943, line 12a, for family leave wages paid in 2022 for leave taken after
the qualified small business payroll tax credit for March 31, 2021, and before October 1, 2021. In
increasing research activities; any credit to be claimed on completing line 17 or Form 943-A, you take into account
Form 5884-C, line 11, for the work opportunity credit for the nonrefundable portion of the COBRA premium
qualified tax-exempt organizations hiring qualified assistance credit against the liability for the first payroll
veterans; and/or any credit to be claimed on Form 5884-D payment of the year, but not below zero. Then reduce the
for the disaster credit for qualified tax-exempt liability for each successive payroll payment of the year
organizations. In completing line 17 or Form 943-A, you until the nonrefundable portion of the credit is used. Any
take into account the nonrefundable portion of the credit COBRA premium assistance credit that is remaining at the
for qualified sick and family leave wages paid in 2022 end of the year because it exceeds the employer share of
against the liability for the first payroll payment of the year, Medicare tax is claimed on line 14g as a refundable credit.
but not below zero. Then reduce the liability for each The refundable portion of the credit doesn't reduce the
successive payroll payment of the year until the liability reported on line 17 or Form 943-A.
nonrefundable portion of the credit is used. Any credit for You may reduce your deposits by the amount of
qualified sick and family leave wages paid in 2022 for the nonrefundable and refundable portions of the
leave taken after March 31, 2020, and before April 1, TIP credit for qualified sick and family leave wages
2021, that is remaining at the end of the year because it and the nonrefundable and refundable portions of the
exceeds the employer share of social security tax is COBRA premium assistance credit, as discussed earlier
claimed on line 14d as a refundable credit. The refundable under Reducing your deposit for COVID-19 credits.
portion of the credit doesn’t reduce the liability reported on
line 17 or Form 943-A.

-18- Instructions for Form 943 (2022)