Posted by Neely Munnerlyn
The IRS has issued Information Release 2020-57 announcing that employers can begin taking advantage of the two new refundable payroll tax credits created by the Families First Coronavirus Response Act.
The Information Release says that under guidance to be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of the qualifying sick and child care leave that they paid, rather than deposit those taxes with the IRS. The payroll taxes that are available for retention include withheld federal income taxes, the employee share of FICA taxes, and the employer share of FICA taxes.
If there are insufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able to file a request for an accelerated payment from the IRS. The details of this expedited procedure will be announced next week, and the IRS says that it expects to be able to process these requests in two weeks or less.
We will continue to provide updates as additional guidance regarding these payroll tax credits is released. If you have any questions, please contact the above author or the T&K tax attorney with whom you regularly work.
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