The Families First Coronavirus Response Act (the “FFCRA”) provides significant benefits to employers that pay Emergency Paid Sick Leave Act wages and Emergency Family and Medical Leave Expansion Act wages. Though complicated, the benefits are potentially significant.
These include tax credits against the taxes imposed on employers by Section 3111(a) (Social Security Tax) on all wages and compensation paid to all employees. The credit created by the payment of wages to the employees being paid sick and family wages under the FFCRA may be taken against the employer’s tax liability on all employees (yes, even those not being paid sick and family leave wages under the FFCRA).
In addition, employers paying sick and leave wages under the FFCRA are permitted to retain an amount of all federal employment taxes equal to the amount of such wages paid rather than depositing them with the IRS. The federal Employment taxes that are available for retention by an employer include federal income taxes withheld from employees, the employees’ share of social security and Medicare taxes, and the employer’s share of social security and Medicare taxes with respect to all employees.
Please be sure to consider how you as an employer might benefit from these credits.