IRS PLAN FOR PAID LEAVE FOR CORONAVIRUS
April 7, 2020 - Douglas Myser
IRS plan for paid leave for coronavirus. The U.S. Treasury Department, Internal Revenue Service, and the U.S. Department of Labor announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar for dollar, for the cost of providing Coronavirus related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act, signed by President Trump on March 18th, 2020. 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 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. IRS plan for paid leave for coronavirus.
Paid sick leave for workers. For COVID-19 related reasons, employers receive up to 80 hours of paid sick leave and expanded paid child care leave when employees children's schools are closed or child care providers are unavailable. Complete coverage. Employers receive 100% reimbursement for paid leave pursuant to the Act. Health insurance costs are also included in the credit. Employers face no payroll tax liability. Self-employed individuals receive an equivalent check. Fast funds. Reimbursement will be quick and easy to obtain. An immediate dollar for dollar tax offset against payroll taxes will be provided. Where a refund is owed, the IRS will send the refund as quickly as possible.
Small business protection. Employers with fewer than 50 employees are eligible for an exemption form the requirements to provide leave for care of a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened. Easing compliance. Requirements subject to 30 day non-enforcement period for good faith compliance efforts.
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