The Families First Coronavirus Response Act was announced and signed by President Trump on March 18, 2020, so those small or mid-sized businesses can file for refundable credits. Businesses with greater than 50 workers but less than 500 are directly affected by this new legislation. Employers must pay sick leave to employees if they leave for Covid-19 related health issues, including self-quarantine, and if workers stay home to be with their children who are out of school.
If your company makes the decision to accommodate your workers with paid sick leave and child care leave, then you may qualify for a credit on payroll taxes up to $200/day maximum. Please note that if you’re a company with less than 50 workers, then you may be exempt from pursuing this requirement.
The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee's own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus. Source: Irs.gov
This new legislation was designed to provide employees with paid leave for health needs, meaning quarantine, or for their caretaker paid leave to care for their children who have been assigned to continue school from home.
What does this mean for you and your employees? If you are a business with fewer than 500 employees, then you have to comply however, this credit is meant to assist with this compliance. According to the IRS website, business owners can now file two new refundable tax credits designed to help offset the cost of providing Coronavirus-related paid leave to their employees.
Key Points for Businesses:
Paid Sick Leave for Workers
Reimbursement to employers
Fast Financial Relief for Employers
Businesses with fewer than 50 employees are exempt from requirement
For businesses who fall within this category, should inquire or consult further to begin the process of paid leave credits, where business owners can retain and access funds they would otherwise pay in payroll taxes to the IRS. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
For more in-depth details for all specifics embedded in this new legislation, go here.
For More Information
For more information about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov. Information regarding the process to receive an advance payment of the credit will be posted next week.
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