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 employee’s children’s schools are closed or child-care providers are unavailable. The Act will help the United States combat the financial strain employers are incurring as a result of the COVID-19 pandemic.
American businesses with fewer than 500 employees will receive 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.
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 employee’s children’s schools are closed or child-care providers are not available.
Complete Coverage
- Health insurance costs are also included in the credit.
- Employers face no payroll tax liability.
- Self-employed individuals receive an equivalent tax credit.
- Employers receive 100% reimbursement for paid leave pursuant to the Act.
Fast Funds
- An immediate dollar-for-dollar tax offset against payroll taxes will be provided.
- Where a refund is owed, the Internal Revenue Service (IRS) will send the refund as quickly as possible.
- Reimbursement will be quick and easy to obtain.
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
- Requirements subject to 30-day non-enforcement period for good-faith compliance efforts.
To take 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 and expedited advance from the IRS by submitting a streamlined claim form that will be released later this week.
For more information
Visit Coronavirus Tax Relief for more information on these tax credits and COVID-19 relief.
As we continue to navigate through these challenging times, Walton is closely monitoring all developments associated with COVID-19 relief and keeping our clients and partners abreast of important updates, so be sure to stay tuned.
As always, should you have any questions, please feel free to contact us.