IRS Tax Reimbursement Guidance and FFRCA Regulations Issued

The IRS has issued much awaited guidance on how employers can claim payroll tax credits for leave provided under the FFCRA. That guidance is available here.

Highlights of the tax credits include:

  • Employers are entitled to a refundable tax credit equal to the amount of paid FFCRA sick leave and/or paid family and medical leave provided to eligible employees.
  • The tax credit includes the employer’s share of Medicare tax applicable to the wages as well as the cost of maintaining health insurance coverage for the employee during the qualified leave period (i.e. qualified health plan expenses).
  • The employer is not subject to the employer portion of social security tax imposed on those wages.