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The Internal Revenue Service (IRS) has issued answers to frequently asked questions (FAQs) about how the Families First Coronavirus Response Act (the FFCRA) tax credits apply to small and midsize businesses. The FFCRA, was signed by President Trump on March 18, 2020, provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.
The FFCRA gives businesses with fewer than 500 employees (referred to throughout these FAQs as “Eligible Employers”) funds to provide employees with paid sick and family and medical leave for reasons related to COVID-19, either for the employee’s own health needs or to care for family members. Workers may receive up to 80 hours of paid sick leave for their own health needs or to care for others and up to an additional ten weeks of paid family leave to care for a child whose school or place of care is closed or child care provider is closed or unavailable due to COVID-19 precautions.
For a more detailed overview of the law, see “Overview of COVID-19-Related Tax Credits for Small and Midsize Businesses.” This Compliance Bulletin provides the FAQs issued by the IRS on how the FFCRA tax credits apply to businesses with fewer than 500 employees and self-employed individuals.