Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave

The U.S. Treasury Department, Internal Revenue Service and the U.S Department of Labor announced that small and midsize employers can began taking advantage of the 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 business is provided under the Families First Coronavirus Response Act signed by President Trump on March 18, 2020.

The Act will help by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for employee’s own health needs or to care for family members. The legislation will enable employers to keep their workers on their payroll. 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.
• Complete coverage– Health insurance cost are also included in the credit
• Fast Funds– An immediate dollar-for-dollar tax offset against payroll taxes will be provided.
• 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.