Practical Answers to Employment Law Issues
April 03, 2020 - Coronavirus (COVID-19), Paid Sick Leave

Payroll Tax Relief Provisions of COVID-19 Legislation

Practical Considerations for Requiring Employees to Report to Work in Light of COVID-19 Stay-at-Home Orders

In response to the coronavirus pandemic, Congress has passed legislation to encourage continued payment of wages and benefits by providing relief to employers in the form of payroll-related tax credits, loans, and tax-deferral programs, including:

  • for businesses with fewer than 500 employees, tax credits to cover the cost of paid sick and paid family leave coverage required for those employees;
  • tax-free forgiveness of certain government-guaranteed loans to small businesses to cover payroll and operating expenses during the coronavirus pandemic;
  • a payroll tax credit for qualifying wages during a time when the employer’s business has been suspended or experienced a significant decline in revenue; and
  • deferral of an employer’s portion of 2020 Social Security taxes not recovered under the payroll tax credit.
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