The 501 S(c)ene

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Reimbursement by government of amounts paid for sick leave and family leave due to coronavirus

The Families First Act was signed into law prior to the CARES Act and provides for government reimbursement of amounts employers pay to employees for sick leave and family leave due to COVID-19. It’s quite confusing how this is calculated, but here is a summary:

  • The government will reimburse up to $2,000 or $5,110 per employee, depending on the reason for the leave (see below).
  • The amount is reimbursed to the employer when the payroll tax deposit is made. The employer calculates the reimbursement amount and deducts it from the total payroll tax deposit.
  • If the payroll tax deposit is less than the amount to be reimbursed, the employer can submit a “claim form” to the IRS for reimbursement of the difference, which can be expected to be received within two weeks.
  • Keep in mind that the organization could be subject to an IRS audit in the future for these reimbursement amounts, so it is imperative to maintain documentation to support the amounts.
  • If the organization has less than 50 employees, it is exempt from requirements to provide leave to an employee to care for a child whose school or child care is closed if the viability of the organization’s business is threatened.

Don’t miss: CARES Act: Forgivable government loans for nonprofits

Employers must provide up to 80 hours for full-time employees and the “normal” hours for part-time employees in the following amounts based on the following reasons:

Max amounts per employee 2 weeks: Up to $511 daily
and $5,110 total
2 weeks: Up to $200 daily
and $2,000 total
12 weeks: Up to $200 daily
and $2,000 total
% of pay 100% for these reasons: 67% for these reasons: 67% for these reasons:
Reason for leave Subject to government
quarantine order
Caring for an individual
who is subject to quarantine
Caring for a child whose school
or place of care is closed
Reason for leave Advised by
healthcare provider
to self-quarantine
Experiencing any other similar
condition specified by
US Dept of HHS
Reason for leave Experiencing symptoms
and seeking diagnosis

For more information and resources on COVID-19, see our coronavirus page. Feel free to contact your Henry+Horne tax adviser with any questions.

Colette Kamps, CPA

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