Guidance is beginning to become available. I plan to highlight some of it on this page and update as more comes out
The Journal of Accountancy published an article that talks about two refundable payroll tax credits, designed to reimburse employers dollar for dollar for the cost of providing coronavirus-related leave to their employees. These are rules for organizations with less than 500 employees and among other things addresses those with less than 50 possibly being exempt.
Applies to qualifying leave between April 1, 2020, and Dec. 31, 2020.
Coronavirus paid sick leave and family leave guidance
It is a Refundable Credit
“To take immediate advantage of the paid leave credits and to ease employers’ cash flow, the IRS says eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
The IRS provided the following examples of how the retention of payroll taxes will work:
If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
Small business with fewer than 50 employees will be eligible for an exemption.
The DOL will issue a temporary nonenforcement policy that provides a period of time for employers to come into compliance with the act.