IRS Tax Tips

Morgan Martin
  • Updated

Here’s an important issue of IRS Tax Tips. Small and midsize employers can claim two new refundable payroll tax credits I have also included recent social media messages. We hope the information will be helpful and encourage publication in your organization’s magazines, newsletters, email distributions, website and social media platforms.

IRS has posted FAQs on the employee retention credit and paid family leave and sick leave credit. Learn more about all the tax new credits available to businesses at https://go.usa.gov/xvGRk #COVIDreliefIRS

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Issue Number: COVID Tax Tip 2020-53

COVID-19 paid leave tax credits for small and midsize businesses

 

Small and midsize employers can claim two new refundable payroll tax credits.  The paid sick leave credit and the paid family leave credit are designed to immediately and fully reimburse eligible employers for the cost of providing COVID-19 related leave to their employees.

Here are some key things to know about these credits.

Coverage
•  Employers receive 100% reimbursement for required paid leave.
•  Health insurance costs are also included in the credit.
•  Employers do not owe their share of social security tax on the paid leave and get a credit for their share of Medicare tax on the paid leave.
•  Self-employed individuals receive an equivalent credit.

Fast funds
•  Reimbursement will be quick and easy.
•  The credit provides a dollar-for-dollar tax offset against the employer’s payroll taxes 
•  The IRS will send any refunds owed as quickly as possible.

To take immediate advantage of the paid leave credits, businesses should use funds they would otherwise pay to the IRS in payroll taxes. If those amounts are not enough to cover the cost of paid leave, employers can request an expedited advance from the IRS by submitting  Form 7200, Advance Payment of Employer Credits Due to COVID-19.

For details about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov.

Share this tip on social media -- #IRSTaxTip: COVID-19 paid leave tax credits for small and midsize businesses. https://go.usa.gov/xvGyC

CoronavirusPaidLeave.jpgCoronavirusChildCareCredit.jpg 

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