Departments Release Information for COVID-19 Business Tax Credits

ACOVID BulletinfromHendersonBrothers

On Friday, March 20th, the U.S. Treasury Department, Internal Revenue Service and the U.S. Department of Labor distributed a news release that contains important information on the new Families First Coronavirus Response Act. Businesses with less than 500 employees can start to take their refundable payroll tax credits immediately by retaining any funds they would pay in payroll taxes. The funds retained are intended to cover the expense, including health plan cost, for any employees on COVID-19 Paid Sick Leave or Paid Family Leave. Payroll taxes that can be withheld include:

  • Federal income tax
  • Employee share of Social Security and Medicare
  • Employer share of Social Security and Medicare

When the payroll tax credit is not sufficient enough to cover an employer’s paid sick leave and paid family leave expense, they can request an expedited advance by the IRS by submitting a claim form that will be released for use within the next week.

Please note that the information contained in this posting is designed to provide general awareness in regard to the subject matter covered. It is not provided as legal, medical, or tax advice, nor is it intended to address all concerns in your workplace or for public health. No representation is made as to the sufficiency for your specific company’s needs. This post should be reviewed by your legal counsel or tax consultant before use.