Small and midsize employers may begin using two new refundable payroll tax credits to obtain reimbursement for the costs of providing coronavirus-related leave to their employees, the U.S. Department of Labor (DOL) and Internal Revenue Service (IRS) announced on March 20, 2020.
This relief is provided under the Families First Coronavirus Response Act (the Act), which was enacted on March 18, 2020. The Act provides funds for employers with fewer than 500 employees to provide paid leave, either for their employees’ own health needs or to care for their family members. The Act aims to help employers keep workers on their payrolls while ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the coronavirus (COVID-19).
Highlights of the Families First Coronavirus Response Act
Paid Leave Requirements
The federal coronavirus relief law requires employers to provide paid sick and family leave for COVID-19-related reasons, including lack of child care.
Employer Tax Credits
Eligible employers may claim two tax credits based on the COVID-19-related paid leave that they provide between April 2 and Dec. 31, 2020.
M. Brant Watson
Senior Vice President
Heffernan Insurance Brokers
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