The Families First Coronavirus Response Act
The Families First Coronavirus Response Act was signed by the President. Here is what you should know:
- As originally drafted, H.R. 6201 would have temporarily provided workers with two-thirds of their wages for up to 12 weeks of qualified leave for a broad range of COVID-19-related
reasons. The revised version of the bill only provides wages if employees can't work because their child's school or child care provider is closed. Workers who have been on the
payroll for at least 30 calendar days will be eligible for these benefits, which will be capped at $200 a day (or $10,000 total) and expire at the end of the year.
Under the bill, many employers will have to provide 80 hours of paid sick leave if the employee has been ordered to quarantine or isolate because of COVID-19. Employees can also
use paid sick leave if they are caring for someone who is in quarantine, or if their child's school or child care provider is closed. Benefits will be immediately available when the law
takes effect (April 2, 2020) and will be capped at $511 a day for a worker's own care and $200 a day when the employee is caring for someone else. This benefit will expire in 2020.
Employers of healthcare providers or emergency responders can elect to exclude the employee from the application of these two provisions.
Employers required to offer emergency FMLA or paid sick leave will be eligible for refundable tax credits. Employers with fewer than 50 workers can apply for an exemption
from providing this leave, if it would jeopardize the viability of the business. Gig-workers and other self-employed workers will also be eligible for a tax credit. (Companies over 500
employees are not covered by this bill.)
Payroll Credit for Paid Sick & Family Leave: this can be claimed on a quarterly basis, equal to 100 percent of the amount of sick leave wages paid. The credit is limited
to $511 per day ($5,110 total) or $200 per day ($2,000 total) if the sick leave is to care for an individual or a minor child whose school is closed. The credit is refundable if it exceeds
the amount the employer owes in payroll tax.
For employers who pay family leave wages under the Act, a separate payroll tax provision allows a 100 percent credit against the employer’s share of the payroll tax for each
employee, limited to $200 per day, or a total of $10,000 per employee. The credit refundable if it exceeds the amount the employer owes in payroll tax.
Employers must increase their gross income for the taxable year by the amount of payroll credit received. Also, any wages considered in determining the payroll credit can’t be
used in determining the amount of credit under IRC 45S related to paid and family medical leave (a separate credit).
Credit for Sick & Family Leave for Self-Employed: Those qualified, such as independent contractors and gig workers, can claim a credit against their regular income taxes
related to leave. The credit covers 100% of self-employed individuals’ daily self-employment income or 67% if they are taking care of a child whose school is closed. The per day amount
is $511 per day if caring for themselves or $200 if caring for a minor child. The number of eligible days is limited to 10 if related to sick leave and 50 for medical leave. The Treasury
department is expected to provide guidance on what documentation will be needed to claim the credit.
Beyond the above, the Act also provides free Coronavirus testing, access to meals for school-aged children forced to stay home, extended unemployment insurance and other