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Families First Coronavirus Response Act

The Act establishes employer tax credits, an Emergency Paid Sick Leave Program, expands the Family Medical Leave Act (FMLA), funds additional unemployment benefits, and provides free Coronavirus Testing.

With the novel Coronavirus COVID-19 beginning to impact the lives of every citizen of the United States, many Americans are left wondering how they are going to survive without a paycheck. As shutdowns begin across the country, employers need to determine if they will continue to pay their employees while they are not working. To help incentivize employers to pay their employees during this time, the government has passed the Families First Coronavirus Response Act (the Act). The Act is projected to provide $100 billion of aid. 

The Act establishes employer tax credits, an Emergency Paid Sick Leave Program, expands the Family Medical Leave Act (FMLA), funds additional unemployment benefits, and provides free Coronavirus Testing.

Sick Leave Pay & Employer Credits:

The Act requires employers with fewer than 500 employees to provide paid sick leave for those who are required to be in self-quarantine, are providing care for at-risk family members, or are caring for a child due to school closures through the establishment of the Emergency Paid Sick Leave Program. This requirement is regardless of how long the employee has worked for the company. Employers are prohibited from requiring an employee use other forms of paid leave already provided by the company before using the emergency sick leave under this Act. Further, the Act creates civil penalties for taking adverse action or retaliating against an employee for utilizing the emergency sick leave.

Employers will receive a refundable tax credit against their payroll taxes (claimed on their quarterly payroll tax returns) equal to 100% of the amount of sick leave paid. However, the credit is limited to $200 per day (except as noted below) and the aggregate tax credit is limited to 10 days of paid sick leave.

The credit is increased to $511 per day if the employee is on leave for any of the following reasons:

  1. The employee is under mandated quarantine or isolation by a governing body;
  2. The employee has been advised by a health care provider to self-quarantine; or
  3. The employee is seeking a medical diagnosis due to symptoms of COVID-19.

Note that employers can exclude health care providers and emergency responders from this benefit.

Self-employed individuals may also utilize the credit. The credit is taken against their regular income taxes. The credit is calculated by multiplying the number of days the self-employed individual is unable to work by 67% or $200, which ever is less. In the case of the above three scenarios, the amounts are increased to 100% or $511, whichever is less.

Expanded FMLA:

 Employees who work for companies with less than 500 employees are already eligible to take up to 12 weeks of unpaid leave under FMLA. However, the Act provides an employer tax credit for 100% of the wages paid to qualified employees under FMLA. The Act adds “leave for a qualifying need related to a public health emergency” to the list over coverage categories under FMLA. The new category applies to any employer with fewer than 500 employees (note this differs from the other categories in that the other categories apply to employers with more than 50 employees). Exemptions are available for employers with fewer than 50 employees if the employer’s economic viability would be jeopardized by complying with the expanded FMLA category.

The new category only applies to employees who have worked for the company for a minimum of 30 days. Further, the new category is only in place until December 31, 2020.

Food Assistance & Unemployment:

The Act also provides the following funding for food assistance:

  1. $500 million in aid for low-income mothers with young children and pregnant women;
  2. $400 million in aid for food banks;
  3. $250 million in aid for a senior nutrition program; and
  4. Suspends work requirements for the Supplemental Nutrition Assistance Program (SNAP) during the COVID-19 crisis.

Unemployment benefits can now be provided to those people who are quarantined and cannot go to work. Additionally, those who are forced to leave a job in order to care for an infected family member can also claim benefits. 

COVID-19 Testing:

The Act requires that all private insurances, Medicare, and Medicaid provide coverage for COVID-19 testing. It also provides for the reimbursement to labs for all uninsured individuals. Further, masks and other respirator protectors are now covered under insurance.

Since 1996, Rosenfield & Company, PLLC (one of the first accounting firms to specialize in the automotive industry), has continually strengthened its skill set in several niche accounting industries. Their unique expertise and deep bench strength set them apart from other CPA firms, making them one of the leading CPA firms serving Automobile Dealerships, Manufacturers and Distributors, Publishing Companies, Broker/Dealers, Cruise Lines and other businesses and high net worth individuals. In addition, they have staff certified in Business Valuations and in assisting in Complex Litigation and Bank Workout matters. They take pride in providing precise and efficient work to clients while still offering access to the same resources provided by large international firms. Their dedication and expert abilities keep them agile and attuned to meeting your company’s business needs. As a CPA firm, their services are offered globally to clients, with offices located in Orlando, Florida, New York City, New York and Iselin, New Jersey.

If you would like more information, please contact Tara Carapellucci at 407-985-2597 or email at tara@rosenfieldandco.com.

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