Under a recently enacted law, eligible small and midsize employers can claim two new refundable payroll tax credits, designed to reimburse them, dollar for dollar, for the cost of providing coronavirus-related leave to their employees. Foley’s here to help our clients effectively address the short- and long-term impacts on their business interests, operations, and objectives. The Department of Labor’s (Department) Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements.
Paycor’s Coronavirus Support Center is here for SMB leaders looking for timely advice on how to safeguard their organizations.
The IRS says it expects to process these requests in two weeks or less. Employees are eligible if they work for private sector companies with fewer than 500 employees or certain public sector employers—with the exception of healthcare providers and emergency responders. For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. Under a recently enacted law, eligible small and midsize employers can claim two new refundable payroll tax credits, designed to reimburse them, dollar for dollar, for the cost of providing coronavirus-related leave to their employees.
guide on managing employee leave scenarios, New Employee Announcement Email Template [Downloadable], Paycor HR Leaders Survey: The State of American Business: 2021, Paycor CFO Survey: The State of American Business: 2021. The DOL will instead focus on helping employers comply during the 30-day period. The Department of Labor’s regulations state that leave taken under the FFCRA for childcare may not be taken intermittently.
The IRS provided the following examples of how the retention of payroll taxes will work: If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments.
Note: an employee can choose to receive existing sick leave, PTO or vacation days instead. In addition, nothing prevents employers of any size from granting additional time off, such as a personal furlough or leave of absence. Each state differs regarding eligibility for benefits, so you should check with your state unemployment agency to see if a furloughed employee can obtain unemployment benefits. Tax credits for qualified sick leave wages and qualified family leave wages will apply to wages paid for the period beginning April 1, 2020, and ending Dec. 31, 2020.
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However, there may be situations where a child has a medical condition (e.g., asthma) and the treatment provider recommends the child not be in school. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date. These measures will apply from April 1, 2020 through December 31, 2020.
— Sally P. Schreiber, J.D., (Sally.Schreiber@aicpa-cima.com) is a JofA senior editor. For more information or questions, please contact your relationship partner or one of the authors listed below who are experienced and tracking updates in these areas.
Earlier this year, Congress passed the Families First Coronavirus Response Act (FFCRA), which applies to employers with fewer than 500 employees.