Coronavirus Legislation Tax Credits

BY Pam Krivda
3/23/2020 - HVAC Employment , COVID-19

The Families First Coronavirus Response Act (“FFCRA”) mandated that, beginning April 1, 2020, employers with fewer than 500 employees provide emergency family leave and emergency paid sick leave for certain, specified coronavirus-related circumstances. 

Employers of fewer than 50 employees can be exempted from the requirement to provide leave to care for a child whose school is closed (or child care is unavailable)

  • Secretary of Labor said that employers of fewer than 50 employees will not have to comply IFcompliance would jeopardize the viability of the company
  • The exemption will be available under “simple and clear criteria” that make exemption from the Act available where compliance would jeopardize the employer’s business
  • The Department of Labor will provide emergency guidance and rulemaking to “clearly articulate” this standard

 How the emergency sick leave and family leave payments can be funded:

  • The Act created the refundable paid sick leave credit and the paid child care leave credit for eligible employers
  • Eligible employers who pay qualifying emergency sick or emergency child care leave can retain an amount of the payroll taxes (they would normally pay over to the IRS) equal to the amount of qualifying emergency pay
  • Payroll taxes that can be retained: withheld federal income taxes; employee share of S.S. and Medicare taxes; employer share of S.S. and Medicare taxes of those employees who received emergency pay
  • If there are insufficient payroll taxes to cover the cost of qualified sick and child care leave paid to the employees, employers will be able to request an accelerated payment from the IRS
  • The IRS expects to process these requests in 2 weeks or less