Families First Coronavirus Response Act – IRS Guidance on Tax Credit
The Families First Coronavirus Response Act (FFCRA) that went into effective on April 1, 2020, provides employers with less than 500 employees refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick leave and extended family medical leave wages to their employees for leave related to COVID-19.
The IRS has recently provided guidance on how employers can apply these tax credits. The new guidance is available on the IRS website, click here.
The IRS guidance does outline a requirement for employers to obtain specific documentation from employees regarding the use of both the paid sick leave and the extended family medical leave.
The Department of Labor guidance recommends that employers require employees to submit a written request for either paid sick leave or extended family medical leave under the FFCRA. The written request must include:
- the employee’s name,
- the date(s) for which the employee is requesting leave,
- the reason related to COVID-19,
- a statement providing written support of the reason, and
- a statement from the employee that they are unable to work (in office and telework) due to the reason listed.
If an employee is requesting paid sick leave the employee must include the following with their request.
- For a government quarantine or isolation, they must provide the name of the entity ordering the quarantine or isolation.
- For self-quarantine because of a health-related concern, they must provide the name of the healthcare provider advising the employee or the individual the employee is caring for.
- If they are taking care of an individual, they must provide the individual’s name and their relation to the employee.
- If they are taking care of a child who is not in school/day care because of a closure they would provide the same information as requested for extended family leave (listed below).
If an employee is requesting extended family leave the employee must include the following with their request.
- The name(s) of the child(ren),
- The name(s) of the school(s) or daycare(s) that are closed or unavailable, and
- A statement that no other individual can care for the child during the requested time.