IRS Issues FAQ on Refundable Tax Credits for Small, Midsize Businesses
The FAQ addresses paid leave under the Families First Coronavirus Response Act.
The Internal Revenue Service released Friday frequently asked questions guidance on small and midsize employers’ refundable tax credits that reimburse them, dollar for dollar, under the Families First Coronavirus Response Act.
The law, enacted March 18, gives businesses with fewer than 500 employees funds to provide paid sick and family and medical leave related to COVID-19, either for the employee’s own health needs or to care for family members, the IRS explains.
Workers may receive up to 80 hours of paid sick leave for their own health needs or to care for others and up to an additional 10 weeks of paid family leave to care for a child whose school or place of care is closed or child care provider is closed or unavailable due to COVID-19 precautions.
The law covers the costs of this paid leave by providing small businesses with refundable tax credits.
The FAQ provides overviews of COVID-19 related tax credits for small and midsize businesses, the paid sick leave refundable credit and the paid family leave refundable credit.
The FAQ explains, for instance, that the law provides comparable credits for self-employed individuals carrying on any trade or business.
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