Today, March 18, 2020, the Senate overwhelming passed the Families First Coronavirus Response Act, previously passed by the House. President Trump is expected to sign the bill.
The bill would provide refundable payroll tax credits through 2020 to employers to cover wages paid to employees while they take time off under the bill’s sick leave (for up to 10 days) and family leave programs (for up to $10,000). The sick leave credit would be for wages up to $511/day or $200/day if the sick leave is to care for a family member or child following the child’s school closing. The family leave credit would be for wages up to $200/day ($10,000/maximum) while the employee is receiving paid family leave. The credit could be claimed each quarter. The credit would not be available for employers receiving a credit for paid family and medical leave under the Tax Cut and Jobs Act.
The bill would also provide for similar refundable credits against the self-employment tax. The sick leave credit would cover 100% of a self-employed individual’s qualified sick leave equivalent amount, or 67% of the individual’s qualified sick leave equivalent amount if they are taking care of a sick family member, or taking care of a child following the child’s school closing. A self-employed individual’s qualified sick leave equivalent amount is the number of days during the taxable year that the individual cannot perform services and is entitled to sick leave pursuant to the bill (up to 10 days), multiplied by the lesser of average daily self-employment income (or 67% of that income if they are taking care of a sick family member or child following a school closing), or $511/day to care for the self-employed individual ($200/day to care for a sick family member or child following a school closing). Self-employed individuals could receive a family leave credit for as many as 50 days multiplied by the lesser of $200 or 67% of their average self-employment income, up to a maximum of $10,000.
Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.