COVID-19 News: Families First Coronavirus Response Act - Tax Credits Start April 1st that Provide Relief to Your Business Now

As the federal government works to make financial help available to workers impacted by COVID-19 layoffs, work reduction and business closings, it’s also offering relief to businesses that are keeping its doors open.

We mentioned in a recent Women’s Business Daily article that the Families First Coronavirus Response Act (FFCRA) enables employees to receive paid time off when they are quarantined, sick with the virus or taking care of child and unable to work, remotely or on-site. Employees can receive up to 80 hours of paid sick leave and expanded paid child care leave. The amount of pay is determined based on the situation, and caps exist for the amount to be paid.

The FFCRA, signed by President Trump March 18 and set to take effect on April 1, will be in place through Dec. 31, 2020. It permits small and midsize employers with fewer than 500 employees to begin taking advantage of two new refundable payroll tax credits (for paid sick and family leave, and expanded paid child care leave) that are designed to immediately and fully reimburse them, dollar for dollar, for the cost of providing coronavirus-related leave to their employees.

Three ways the act can provide your business with quick relief:

• You can retain a portion of the deposit you would otherwise would pay as part of employees’ federal, social security and Medicare taxes.

• If the amount you’re paying in coronavirus-related leave to your employees exceeds your tax liability, you can file for a refund immediately and potentially receive the funds within two weeks.

• You have a 30-day non-enforcement period to work with. So, if you have acted reasonably and in good faith to comply with the act, the U.S. Department of Labor (DOL) will not take action against your business for violations (which could be costly).

If your business has fewer than 50 employees, it’s eligible for an exemption from the requirements to provide leave for an employee to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened. You can get details about FFCRA requirements and the tax credits here.

Additionally, the DOL has issued an FFCRA poster for display in your business starting April 1. You can access the poster here.

If you need more information or have questions about how this affects your business, contact Mary Smith, SHRM-SCP, at mary.smith@cbsmithcpa.com or call 678.205.5278, x125.