Late Friday, the Treasury, IRS and DOL announced a plan for small and midsize employers to start taking advantage of two new refundable payroll tax credits. The tax credits will fully reimburse employers for the cost of paid leave they must provide employees under the Families First Coronavirus Response Act (FFCRA). This action was taken in response to concerns that some employers could not afford the cash outlay until their next quarterly filing in June.
Other highlights from the news release IR-2020-57:
- Employers can retain and access funds they would otherwise pay to the IRS in payroll taxes. If those amounts are insufficient, employers can seek an advance from the IRS by submitting a claim form which the IRS expects to process within two weeks. The claims form and instructions will be provided next week.
- 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. The DOL will provide exemption details soon.
- 30-day non-enforcement period for good faith compliance efforts.
Employers should contact their payroll provider immediately to set up a code for these types of leaves.
If you have questions or need help, please contact one of our benefit consultants.