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.