Coronavirus (COVID-19) Relief Center
Coronavirus (COVID-19) Relief Center
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Federal Government
These resources – like the public health crisis itself – are constantly evolving and are only current as to the date of publication. This page was last updated on April 26, 2020.
We recommend that you monitor this site, as well as the sites referenced in these resources, for updates and changes as we expect the situation and solutions to change over the coming weeks and months. For information on specific programs, we encourage you to visit the websites of the organizations or government entities that are responsible for the relief.
Description of Program and Relief
Payroll Credit for Required Paid Sick Leave
The Families First Coronavirus Response Act provides a tax credit to eligible employers for wages paid under the Emergency Paid Sick Leave Act (the “EPSLA”).
Employers are entitled to a refundable credit against their net employer-side Federal Insurance Contributions Act (“FICA”) taxes each calendar quarter, equal to 100% of wages paid under the EPSLA, subject to the following caps:
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$511 per employee per day and $5,110 in the aggregate if the employee is absent due to a coronavirus-related quarantine or isolation order, has been advised to self-quarantine, or is experiencing coronavirus symptoms and seeking a medical diagnosis; or
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$200 per employee per day and $2,000 in the aggregate if the employee is absent to care for an individual subject to quarantine or an isolation order or who has been advised to self-quarantine, or if the employee is caring for a child whose school or care is unavailable due to coronavirus.
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Employers may claim up to 10 days’ credit for each employee receiving payments under the EPSLA through December 31, 2020. Employers will receive additional money through this tax credit increasing to cover a portion of the costs employers pay to provide health insurance to their employees.
Government or Lead Agency
Department of the Treasury, through the Internal Revenue Service
Dates Available
Not currently available, but intended to be administered via the payroll tax system, with regulations / guidance to be issued by Treasury and the IRS. Will become available once the Secretary of Treasury selects an effective date, no later than April 2, 2020.
Timing is generally quarterly, though employers may effectively be able to count expected credits towards employer-side FICA (or Railroad Retirement Tax Act (“RRTA”)) taxes that would otherwise be paid in connection with payroll under regulations and guidance to be issued, through December 31, 2020.
Eligibility Requirements/Restrictions
The employer must have employees who receive wages under the EPSLA. Excess credits over net employer side FICA (or RRTA) taxes are refundable, though the precise mechanic of the refund is not set out in the statute, with administration of the refunds instead to be determined under pre-existing grants of authority to the Secretary of Treasury.
No credit is available to the extent a credit would already be available under Section 45S of the Internal Revenue Code (establishing a credit for the payment of employee wages while the employee is on family or medical leave under the Family and Medical Leave Act of 1993 or similar employer policies). Employers can elect, on a quarter-by-quarter basis under regulations or guidance to be issued, not to take the credit.
List of Additional Information
Treasury is authorized to issue regulations or guidance waiving failure-to-deposit penalties for employer side FICA (or RRTA) taxes not paid in anticipation of this credit.
To avoid a double benefit, an employer’s income is increased by the amount of the credit. This increase effectively eliminates the deduction generated by the payment of EPSLA wages for which a credit is provided.
© 2021 Paul, Weiss, Rifkind, Wharton & Garrison LLP. This does not constitute legal advice and does not create an attorney-client relationship. In some jurisdictions, this publication may be considered attorney advertising. Past representations are no guarantee of future outcomes.