Coronavirus Stimulus Package – Related Tax Credits for Required Paid Leave

On Friday, April 17, the IRS released guidance in the form of frequently asked questions with regard to refundable tax credits, authorized by the Families First Coronavirus Response Act enacted on March 18, 2020. The credits provide funds to small- to medium-sized businesses with fewer than 500 employees 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 credits reimburse employers dollar-for-dollar to allow employees up to 80 hours of paid sick leave 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 restrictions. Certain self-employed individuals in similar circumstances are entitled to similar credits.