March 21, 2021
Yesterday, the U.S. Treasury Department, Internal Revenue
Service (IRS), and the U.S. Department of Labor (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 (Act), signed by
President Trump on March 18, 2020.
Key Takeaways
· Paid Sick Leave for Workers
For COVID-19 related reasons, employees 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.
o Health insurance costs are also included in the credit.
o Employers face no payroll tax liability.
o Self-employed individuals receive an equivalent credit.
· Fast Funds Reimbursement will be quick
and easy to obtain.
o An immediate dollar-for-dollar tax offset against payroll
taxes will be provided
o 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 from the requirements to provide leave to care for a child whose
school is closed, or child care is unavailable in cases where the viability
of the business is threatened.
· Easing Compliance
o Requirements subject to 30-day non-enforcement period for good
faith compliance efforts. To take immediate advantage of the paid leave
credits, businesses can retain and access funds that they would otherwise pay
to the IRS in payroll taxes. 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.
To take immediate advantage of the paid leave credits,
businesses can retain and access funds that they would otherwise pay to the
IRS in payroll taxes. 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 a full
copy of the announcement, click on the link below:
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