The impact of the COVID-19 emergency on all businesses has been transformative. The combination of shelter in place orders with forced business closures have left many facing dwindling demand for products and services. The seemingly overnight shift has forced many to make tough decisions about whether to furlough or terminate employees and how to manage expenses. The depth of the challenge becomes clear in light of the reported 4.6 million Californians who have filed for unemployment. To help cope with the emergency, Congress passed both the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Security (CARES) Act. The FFCRA provides expanded sick leave benefits and the CARES Act provides various tax and financial relief options. While they attack the emergency from different angles and for different purposes, they are connected through their use of payroll tax credits. (more…)
On April 3, 2020, the IRS has released Form 7200 to claim advance payment of tax credits discussed below.
- IRS FAQ: https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs
The Families First Coronavirus Response Act (FFCRA), enacted on March 18, 2020, requires private employers with fewer than 500 employees to provide employees with paid sick leave or extended family and medical leave for specific reasons related to COVID-19.
Effective Date: April 1, 2020, and applies to leave taken between April 1, 2020 – December 31, 2020 (more…)