Join Department of Labor and Internal Revenue Service for a presentation on the new Families First Coronavirus Response Act and Employer Tax Credit and Employee Retention Credit
On April 1, 2020, the U.S. Department of Labor announced new action regarding how American workers and employers will benefit from the protections and relief offered by the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, both part of the Families First Coronavirus Response Act (FFCRA).
FFCRA helps the United States combat the workplace effects of COVID-19 by reimbursing American private employers that have fewer than 500 employees with tax credits for the costs of providing employees with paid leave for specified reasons related to COVID-19. The law enables employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus. WHD administers the paid leave provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act.
The Wage and Hour Division (WHD) provides additional information on common issues employers and employees face when responding to COVID-19 and its effects on wages and hours worked under the Fair Labor Standards Act and job-protected leave under the Family and Medical Leave Act at https://www.dol.gov/agencies/whd/pandemic
For more information about the laws enforced by the WHD, call 866-4US-WAGE (1-866-487-9243), or visit https://www.dol.gov/agencies/whd.
WHD’s mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the nation’s workforce.
New employer credit available for paid family leave
Eligible employers can receive a refundable credit for required leave provided to employees who are unable to work or telework because they're caring for someone with COVID-19, caring for a child whose school or place of care is closed, or childcare is unavailable due to COVID-19.
Employers are entitled to a sick leave credit for up to 80 hours limited to 2/3 of employee's regular pay or up to $200 per day, but no more than $2,000 per employee in total, plus related health care costs.
Eligible employers can claim tax credits for leave taken from April 1, 2020 - December 31, 2020, on Form 941 or Form 7200 for an advance credit.
For more information, visit the New Employer Tax Credits page on IRS.gov.
Employee retention credit for businesses affected by COVID-19
The employee retention credit encourages businesses to keep employees on their payroll.
Eligible employers can claim this refundable tax credit for 50% of up to $10,000 in wages, including related health care costs. The maximum credit is $5,000 per employee. It can be applied against certain employment taxes.
Employers can claim the credit for qualified wages paid between March 13, 2020 and December 31, 2020, on Form 941 or submit Form 7200 for an advance credit.
The credit is available to all eligible employers regardless of size, including tax-exempt organizations. There are two exceptions: federal, state and local government entities and their agencies, and businesses that take small business interruption loans.
Deferral of employment tax deposits and payments through December 31, 2020
The Coronavirus, Aid, Relief and Economic Security Act (CARES Act) allows employers to defer the deposit and payment of the employer's share of Social Security taxes and self-employed individuals to defer payment of certain self-employment taxes. The CARES Act provides that employers may defer the deposit and payment of the employer's portion of Social Security taxes and certain railroad retirement taxes.
The deferred deposits of the employer's share of Social Security tax must be deposited by the following dates to be treated as timely (and avoid a failure to deposit penalty): On December 31, 2021, 50 percent of the deferred amount; and On December 31, 2022, the remaining amount.
More IRS.gov information
Austin District Office
Nicole Sellers, District Director
Rosalinda Haro, Assistant District Director
Brenda Hernandez, Community Outreach and Resource Planning Specialist (CORPS)
Houston District Office
Robin Mallett, District Director
Lucia Garcia, Community Outreach and Resource Planning Specialist (CORPS)