Update: Worker Paid-Leave & COVID-19 Tax Credits for select employers

Paid Sick-Leave for Workers 
For COVID-19 related reasons, employees receive up to 80 hours of paid sick-leave and expanded paid childcare leave when employees’ children’s schools are closed or childcare 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:

  1. Paid Sick Leave for Workers 
    • For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid childcare leave when employees’ children’s schools are closed or child care providers are unavailable. 
  2. Complete Coverage
    • Health insurance costs are also included in the credit.
    • Employers face no payroll tax liability.
    • Self-employed individuals receive an equivalent credit.
    • Employers receive 100% reimbursement for paid leave pursuant to the Act.
  3. Fast Funds
    • 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.
    • Reimbursement will be quick and easy to obtain.
  4. 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 childcare is unavailable in cases where the viability of the business is threatened.
  5. Easing Compliance
    • 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 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.


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