Legislation Updates

Federal Tax Filing Deadline Extended

The Treasury Department announced today an extension of the April 15th  filing  deadline for individuals and corporations (who use the calendar year-end).  The extended Federal filing deadline is now July 15, 2020.

Coronavirus Relief Legislation Provides for Tax Credits for Employers

President Trump signed into law H.R. 6021, The Families First Coronavirus Response Act. The Act provides for tax credits for employers who provide family or medical leave or paid sick leave for their employees who miss work for various COVID-19 (Coronavirus) related reasons.

The key provisions of The Act provide for employer payroll tax credits for required paid family leave and required paid sick leave pertaining to employees and self-employed individuals. These provisions are described below.

Payroll tax credit for required family leave

The payroll tax credit for required family leave provides for an employer payroll tax credit that equals 100% of the qualified family leave wages paid by an employer. Generally, it requires employers with less than 500 employees to provide emergency leave when an employee is unable to work or telework due to care for a son or daughter under 18 because of a public health emergency pertaining to the Coronavirus.

Self-employed individuals will be eligible for qualified family leave equivalent amounts if they would be entitled to receive paid leave if the individual was an employee. Such individuals will be able to claim a refundable credit against income tax.

Generally, the credit is limited to $200 in eligible daily family leave wages received by an employee, subject to a maximum wage threshold per employee. Eligible wages consist of wages paid within 15 days of enactment of this Act through December 31, 2020. The credit will be applied against the employer portion of social security taxes. Other restrictions and limits apply to the credit.

Payroll tax credit for required paid sick leave

The payroll tax credit for required sick leave provides for an employer payroll tax credit equal to 100% of qualified sick leave wages paid by an employer. Generally, it requires employers with less than 500 employees to provide up to 80 hours of paid sick time through the end of 2020 if the employee is unable to work due to having Coronavirus or caring for someone who has Coronavirus.

Self-employed individuals will be eligible for qualified sick leave equivalent amounts if they would be entitled to receive paid leave if the individual was an employee. Such individuals will be able to claim a refundable credit against income tax.

Generally, the credit is limited to $511 in eligible daily sick leave wages received by an employee who has or has been exposed to Coronavirus, and $200 for other workers. Eligible wages consist of wages paid within 15 days of enactment of this Act through December 31, 2020. The credit will be applied against the employer portion of social security taxes. There are other restrictions and limits to the credit.

GCS is committed to helping our clients in any manner during this crisis. If you have more questions on how this new law may impact your business, please contact us.