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.
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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
