CSLFRF Taxability and Reporting of Payment FAQs

General Questions

Taxability and Reporting of Payment

Premium pay amounts paid to employees are considered wages. Employers generally must withhold federal income tax as well as social security tax and Medicare tax from employees' wages. (Employers also may have to pay federal unemployment tax on the wages.)

(See IRS FAQs Q3)

Regardless of whether an amount is paid to an employee by their state/local government, or by their employer, a payment that is in the nature of compensation for services is not excludable as a qualified disaster relief payment under section 139 of the Code. If you are performing services as an employee, the premium pay is also generally considered wages and is subject to withholding of applicable taxes.

(See IRS FAQs Q2)

Payments to individuals from SLFRF for utilities (or arranges of utilities) is NOT considered income and therefore a Form 1099-MISC is not required.