April 02, 2020

Families First Coronavirus Response Act Provides Tax Credits for Paid and Family Leave

The following information is for educational purposes only.

What It Does

Following the Families First Coronavirus Response Act, the Treasury Department and IRS announced resources to help businesses with fewer than 500 employees — which can include radiology practices — with paid sick and family leave tax credits.

Eligible employers can receive a credit in the full amount of the qualified sick leave and family leave wages paid for between April 1, 2020 and Dec. 31, 2020.

How It Works

  • Employers can be reimbursed immediately by reducing their federal employment tax deposits. If there are insufficient federal employment taxes to cover the amount of the credits, employers may request an accelerated payment from the IRS.
  • Eligible employers can claim credits on their tax returns or by reducing their federal employment tax deposits.
  • Eligible employers may request an advance payment of the credits from the IRS by submitting a Form 7200, Advance Payment of Employer Credits Due to COVID-19. The IRS is expected to begin processing requests during April 2020.

Employees of covered employers would be eligible for the following:

  • Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
  • Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay if the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and
  • Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

The Department of Labor’s temporary rule issuing regulations regarding the new provisions, including a fact sheet on employer paid leave requirements is available here.

The IRS FAQs on tax credits for required paid leave are available here.