Employer Payroll tax credits for COVID-19 related paid leave

Subject to the caps, the Act provides a 100% payroll tax credit to employers for wages paid under both the FMLA and the Paid Sick Leave portions of the Act.  

• Employers may claim a credit against payroll tax liability for each calendar quarter (i.e., a dollar for dollar tax offset).  

• If the credit exceeds an employer’s payroll taxes for a calendar quarter, the excess is generally refundable.

• If payroll taxes necessary to cover the cost of qualified sick and family leave paid are insufficient, employers will be able to file a request for an accelerated payment from the IRS.

• Equivalent family leave and sick leave credit amounts available to self-employed individuals who may claim leave credit on their personal income return.

• Paid sick leave:  $511 per employee per day for leave taken for qualifying reasons 1, 2, or 3 above; and $200 per employee per day for leave taken for qualifying reasons 4, 5, or 6.

• Paid family and medical leave:  Employers may be able to claim a credit of up to $200 per employee per day for any paid COVID-19-related FMLA leave provided to employees.  This credit is capped at an aggregate of $10,000 for all calendar quarters per employee.

• An employer’s tax credit is increased by the amount the employer pays to maintain health care related to new sick leave and FMLA benefits. This will allow a company to maintain health care benefits while the employee is on leave.

Contact us to schedule your FREE consultation.

Lázaro Law Group
321 S. Plymouth Ct Suite 1250,
Chicago, IL 60604

Rafael E. Lazaro
Rated by Super Lawyers


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