April 9, 2020

The Families First Coronavirus Response Act requires private employers with fewer than 500 employees to provide paid family leave and emergency paid sick leave to eligible employees. In order to pay for these benefits, the FFCRA allows eligible employers to take advantage of dollar-for-dollar tax credits.

Under the FFCRA, employees may receive up to 80 hours of paid sick leave, and an additional ten weeks of paid leave to care for one or more school-aged child whose school or daycare is closed for COVID-19 related reasons. Eligible employers that pay employees qualified wages under the FFCRA can claim a dollar-for-dollar quarterly payroll tax credit for the total amount of qualified emergency sick and family medical leave wages paid to their employees, including the Medicare tax imposed on those wages, and allocable qualified health plan expenses.

Eligible employers are also entitled to retain the amount paid for qualified wages under the FFCRA rather than pay those sums to the IRS. If an employer’s would-be employment tax deposit is insufficient to cover the cost of the qualified wages, allocable qualified health plan expenses, and share of Medicare tax imposed on those wages, the employer will be permitted to request an advance payment from the IRS.

Click here to read the IRS’s current Frequently Asked Questions related to these tax credits.

About the Author: Meaghan Kramer assists clients with employment law and commercial litigation matters. Meaghan is advising clients on workplace related legal issues arising from COVID-19. Meaghan writes about employment issues, including safeguarding workplace confidences, and creating work environments that are free from discrimination and harassment. | 602.222.4995

Disclaimer: This article is not legal advice and is only for general, non-specific informational purposes. It is not intended to cover all the issues related to the topic discussed. If you have a legal matter, the specific facts that apply to you may require legal knowledge not addressed by this article. If you need legal advice, consult with a lawyer.