The “Families First Coronavirus Response Act,” which we mentioned in last week’s Tax Alert, has now passed the House vote, gained the “full support” of the President, and awaits Senate action. The bill, which is outlined below for your reference, applies only to employers with 50 – 500 employees, and includes emergency family and medical leave, emergency paid sick leave, and certain tax credit provisions to help pay for that leave.
The tax credits in the bill only apply to the employer leave required by this act, and therefore the employer size limitations of only 50-500 employee companies also applies to the availability of these tax credits. The credits are refundable, and are equal to 100% of leave wages required to be paid under the bill, with some provision restricts and caps.
The bill’s emergency family and medical leave requires up to 12 weeks for those with a “qualifying need related to a public health emergency” (i.e., coronavirus quarantine, to care for a family member who is required or recommended to quarantine, or to care for a minor child if the child’s school or place of care has closed due to a coronavirus). This leave may be unpaid for the first two weeks and then must be paid out at a rate of no less than two-thirds of the employee’s usual rate of pay.
The bill also includes emergency paid sick leave for two weeks to care for employee’s sickness or a family member’s or minor child’s sickness (includes if the child’s school or place of care has closed, due to coronavirus). The leave must be paid out at a rate of employee’s regular pay (if leave is due to employee’s sickness) or at a rate of no less than two-thirds of the employee’s usual rate of pay (if leave is due to family member’s or child’s sickness).
We will continue to keep you informed as the bill moves through Congress, and we encourage you to reach out to your First Advantage Tax Account Consultant, or your company’s tax advisor or legal counsel, to discuss the ongoing tax-related impacts of coronavirus.