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IRS FAQs on Employee Tax Credits Related to Coronavirus

By Amber Stevenson

The Families First Coronavirus Response Act (FFCRA) signed into law by President Trump on March 18, 2020 provides family and medical leave, and sick leave, to employees and provides credits to employers who provide such leave. On its website, the IRS has released a series of frequently asked questions regarding credits for wages paid for family and medical leave and for emergency paid sick time.  These FAQs include important information regarding what employers are eligible for the credits, when they can claim the credits and what amount of credit employers are eligible to receive. 

Additionally, the CARES act provides a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 crisis.  The credit is available to employers, including non-profits, whose operations have ben fully or partially suspended as a result of a government order limiting commerce, travel, or group meetings. The credit is also available to employers who have experienced a greater than 50% reduction in quarterly receipts, measured on a year over year basis.  The IRS has also released a series of frequently asked questions regarding this credit.  These frequently asked questions clarify which employers are eligible and when the operation of a business is considered “partially suspended,” as well as other questions about refundability and what employment taxes are offset by the credit.

If you believe your business may qualify for either of these credits, please refer to the information included on the IRS website and contact us with any questions you may have about their applicability to you.  We have also included a link to the IRS’s frequently asked questions regarding the FFCRA in general, as it relates to both employers and employees.  We’re here to help during this difficult time.

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