The CARES Act is adding the last of three new tax credits that may be available to employers continuing to spend on the workers during this national health emergency.
In this article, we explore what’s in the Act for business clients who can still pay their staff. There are three specific tax credits worth noting as described below – these details may influence how you manage your company and payroll budget moving forward!
- Family and Medical Leave Credit
The recent extension of the first credit, set to expire at year’s end, has now been extended through 2020. This tax break is available for employers who pay their employees on family and medical leave subject to certain conditions; it can also be prorated if they’re part-time workers with a maximum wage amount per month rather than full-timers whose wages exceed $US 7000 ($7000). The percentage range goes from 12 5 percent all the way up to 25%.
Family and medical leave are essential for many reasons, such as taking care of newborns or loved ones who are ill. Employees can also use this type of unpaid time off to bond with their children while they’re still small; it allows people to be hands-on parents without feeling selfish because there’s no money coming in from wages right away – so you will make your future!
- COVID-19 Leave Credit
The Families First Coronavirus Response Act requires employers with fewer than 500 employees to allow emergency paid sick leaves of up to $511 per day for ten days or the amount granted by law, whichever comes first. This applies if you are in COVID-19 quarantine and seeking a diagnosis of coronavirus infection; also, please take advantage of any time during this period when your doctor tells you it’s safe!
The FFCRA ensures employees have the right to take up 12 weeks of family leave for COVID-19 quarantine. In return, employers can claim a tax credit equal to two-thirds of pay worth up to $200 per day or more as long they are providing it at least partially toward paying their salary while on leave from work due directly related reasons, not just personal health issues which can benefit many people in this situation without having any adverse effect whatsoever upon business activities since taking care both oneself and loved ones should come first after all!
- Employer Retention Credit
The proposed CARES Act authorizes a credit of 50 percent on qualified wages paid after March 12th, 2020, and before January 1st, 2021. For these purposes, “qualified wage-payments” are limited to the first $10k per team member during this period; however, there is no maximum limit if you have more than one worker whose payments would qualify as well (though remember that they cannot receive less than what was paid initially). The eligible employer must also be experiencing either full or partial suspension due to an outbreak-related order from government regulations such as COVID 19 – which could happen at any point throughout 2019 while other factors might lead us into consideration, too, including significant declines in gross receipts.
Qualified wages are the mirror image of total wage payments. This means that if an employer paid more than $10,000 to its part-time or temporary employees last year, then they can still receive qualified benefits like health care insurance premiums even though those workers were not providing services due to their business being closed down for whatever reason–even when operations have been suspended because there was no money coming into gross receipts from sales during this period!
For any employer with 100 or fewer full-time employees during 2019, qualified wages are the amounts paid to workers, including health care plan costs (up $10k per team member), regardless of whether they’re providing services.
Employees should not double-credit themselves by using too many leaves already accounted for on their records.
We recommend that you share this article with your business clients. They may need our assistance relating to these new credits!