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Coronavirus: Senate Passes Emergency Coronavirus Response Bill Providing For Tax Credits for Sick and Family Leave Payments; President Trump Expected to Sign

Today, March 18, 2020, the Senate overwhelming passed the Families First Coronavirus Response Act, previously passed by the House.  President Trump is expected to sign the bill.

The bill would provide refundable payroll tax credits through 2020 to employers to cover wages paid to employees while they take time off under the bill’s sick leave and family leave programs, for up to 10 days.  The sick leave credit would be for wages up to $511/day or $200/day if the sick leave is to care for a family member or child following the child’s school closing.  The family leave credit would be for wages up to $200/day ($10,000/maximum) while the employee is receiving paid family leave.  The credit could be claimed each quarter.  The credit would not be available for employers receiving a credit for paid family and medical leave under the Tax Cut and Jobs Act.

The bill would also provide for a similar refundable credit against the self-employment tax for up to 10 days.  It would cover 100% of a self-employed individual’s qualified sick leave equivalent amount, or 67% of the individual’s qualified sick leave equivalent amount if they are taking care of a sick family member, or taking care of a child following the child’s school closing.  A self-employed individual’s qualified sick leave equivalent amount is the number of days during the taxable year that the individual cannot perform services and is entitled to sick leave pursuant to the bill, multiplied by the lesser of average daily self-employment income (or 67% of that income if they are taking care of a sick family member or child following a school closing), or $511/day to care for the self-employed individual ($200/day to care for a sick family member or child following a school closing).  Self-employed individuals could receive a family leave credit for as many as 50 days multiplied by the lesser of $200 or 67% of their average self-employment income.

© 2020 Proskauer Rose LLP.

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About this Author

Elizabeth Wytock Tax Attorney
Associate

Elizabeth Johnston Wytock is an associate in the Tax Department. Elizabeth earned her J.D. from the University of Virginia School of Law, where she was the executive editor of the Virginia Law Review. While at UVA Law, she worked as a legal intern for the Honorable Nancy Atlas and the Honorable Mary Milloy at the U.S. District Court for the Southern District of Texas.

Prior to law school, Elizabeth served as a health policy program assistant at the National Academy of Sciences in Washington, D.C. She received her B.A. from Georgetown University.

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