Federal Updates: Taxes
Earlier this week, the Families First Coronavirus Response Act was quickly moved through Congress and signed into law by President Trump. The Act, which takes effect on April 2, 2020 and expires on December 31, 2020, amends current FMLA law in response to the Coronavirus Crisis, and provides for paid sick leave in some cases.
Expanded FMLA
The Emergency Family and Medical Leave Expansion Act (EFMLEA) benefits apply to companies with 500 or fewer employees (exceptions may apply for businesses with fewer than 50 employees, and other groups) and requires those employers pay qualified employees 2/3 of their regular pay for up to 10 weeks. Pay is capped at $200/day or a total of $10,000.
Under this Emergency Act, eligible employees may take this leave if they are unable to work because they must care for a child if that child’s school or daycare is closed due to Covid-19
Paid Sick Leave
This Emergency Act also included provisions for paid sick leave in some circumstances, and also applies to companies with fewer than 500 employees. Qualified employees would be eligible for up to two weeks (80 hours) of paid sick time if they:
- are under federal, state, or local quarantine
- have been advised by a healthcare provider to self-quarantine
- are experiencing symptoms and seeking a medical diagnosis
- are caring for someone subject to quarantine or who has been advised to self-quarantine
- are caring for the child of an employee if school or daycare is closed
Employers will be given a dollar-for-dollar tax credit for paid sick leave or emergency family and medical leave, pursuant to the Emergency Act. The tax credit will be applied to social security taxes paid by the employer.
The information above is not intended to be legal advice. If you have specific questions about the bill, or how it may apply to you, please contact the human resources department at your company.
For more information, and a title-by-title breakdown of the Act, please go to:
The full bill can be read here:
https://www.congress.gov/116/bills/hr6201/BILLS-116hr6201enr.pdf
Tax-Filing and Payment Deadlines Extended
The President also issued an emergency declaration to push back the federal deadline to make certain required tax payments. Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the deadline to make certain payments has been moved to July 15, 2020, three months past the regular filing date of April 15.
More information about the payment deadline can be found at:
https://www.irs.gov/pub/irs-drop/n-20-17.pdf
Today, Treasury Secretary Mnuchin announced that individual and business tax filing deadlines will also be extended through July 15, 2020. A publication is anticipated to be forthcoming.