Program

COVID-19 Federal Assistance e311

Topics

Premium & Hazard Pay

How will premium pay be taxed?

At this time, neither the Internal Revenue Service (“IRS”) nor the U.S. Department of the Treasury (“Treasury”) have issued guidance addressing the tax implications of ‘premium pay’ for eligible individuals through the American Rescue Plan Act of 2021’s (“ARP”) Coronavirus Local Fiscal Recovery Funds (“CLFRF”).

Additionally, Treasury has not provided clarity as to whether premium pay, as a retrospective grant or as ongoing supplementation of wages, will be taxed as regular wages or supplemental income.

Last Revised: June 3, 2021