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1 1 (March 16, 2020)

handle is hein.crs/goveavi0001 and id is 1 raw text is: Congressional .Research Service ~ ~~ ~informing the legis!ative debate since 1914____________________ Tax Credit for Paid Sick and Family Leave in the Families First Coronavirus Response Act (H.R. 6201) March 16, 2020 The Families First Coronavirus Response Act (H.R. 6201) includes an employer tax credit for the paid sick and family leave required as part of this legislation. This tax credit is intended to help businesses with the cost of providing paid leave to address the coronavirus disease (COVID-19) pandemic. Tax Credits for Paid Leave The employer payroll tax credit is for wages paid to fulfill the new leave requirements. The Emergency Paid Sick Leave Act, Division E of H.R. 6201, requires private employers with fewer than 500 employees, and all government employers, to provide employees with two workweeks of paid sick leave for coronavirus-related leave purposes. The Emergency Family and Medical Leave Expansion Act, Division C of H.R. 6201, provides employees of employers with fewer than 500 employees expanded job-protected Family and Medical Leave Act (FMLA) leave; under certain conditions this leave must be partially compensated by employers. The legislation expands access to paid sick and family leave for employees at many small- and mid-sized businesses. Employees of large businesses, however, would not have guaranteed access to paid sick or family leave under this proposal. Employer Payroll Tax Credit The employer payroll tax credit is computed using wages paid, and claimed against the employer's share of the Social Security payroll tax in each calendar quarter. The Social Security payroll tax rate is generally 12.4% of wages, with 6.2% paid by employers and 6.2% paid by employees. The tax applies to workers' earnings up to an annual limit, $137,700 in 2020. The Social Security trust fund will not be affected by the tax credit. A general fund transfer to the trust fund will offset the reduction in federal revenues from the tax credit. The tax credit is refundable. If an employer's tax credits exceed its payroll tax liability, the excess can be received as a payment from the Treasury. Employers that claim this credit are required to include the amount claimed in gross income, for income tax purposes, offsetting the reduction in gross income from Congressional Research Service https://crsreports. congress.gov IN11243 CRS INSIGHT Prepared for Members and Committees of Congress

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