Covered employers qualify for dollar-for-dollar reimbursement through tax credits for all
qualifying wages paid under the FFCRA. Qualifying wages are those paid to an employee
who takes leave under the Act for a qualifying reason, up to the appropriate per diem and
aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred
to maintain health insurance coverage.
Under guidance expected to be released this week, eligible employers who pay qualifying
sick or child care leave will be able to retain an amount of the payroll taxes equal to
the amount of qualifying sick and child care leave that they paid, rather than deposit
them with the IRS. The payroll taxes available for employers to retain include withheld
federal income taxes, the employee share of Social Security and Medicare taxes, and the
employer share of Social Security and Medicare taxes with respect to all employees.
If those amounts are not sufficient to cover the cost of paid leave, employers can seek an
expedited advance from the IRS by submitting a streamlined claim form that the IRS plans
to release this week. The IRS expects to process these requests in two weeks or less.