The IRS issued a “fact sheet” with information about tax credits available to employers for funding paid leave in response to the coronavirus (COVID-19) pandemic.
The IRS fact sheet (FS-2020-06, May 2020) explains that the “The Families First Coronavirus Response Act” provides tax credits to reimburse employers for the costs of providing paid sick leave and paid family and medical leave to employees unable to work because of COVID-19.
As the IRS fact sheet further explains:
An eligible employer is entitled to a fully refundable tax credit equal to the required paid family leave wages. Eligible employers can also get an additional credit for the employer's share of Medicare tax imposed on those wages and its cost of maintaining health insurance coverage for the employee during the family leave period. The eligible employer is not subject to the employer portion of Social Security tax on those wages.
The IRS fact sheet includes examples illustrating application of this relief.
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