IRS Issues Guidance On Paid Leave Tax Credits

Volume: 19 | Issue: 15
April 1, 2020
The U.S. Internal Revenue Service has published a guidance for small and mid-sized businesses seeking tax credits for paid leave under the Families First Coronavirus Response Act (FFCRA).
The Guidance provides an overview of the FFCRA’s refundable tax credit provisions as well as FAQs for more detailed information regarding the requirements, limitations, and application of the paid leave credits. Employers should note that the IRS has issued specific guidance on the documentation an employer needs from employees taking paid leave. Additionally, the IRS interprets public health emergency FMLA leave to be limited to children 14 and younger (unless special circumstances exist) and to only one parent/caregiver. The age limitation is not consistent with the FMLA or the FFCRA.
In FAQ 44, the IRS states that an employee needing any type of paid leave should provide an employer with a written request that provides:
  • the employee’s name;
  • the date or dates for which leave is requested;
  • a statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and
  • a statement that the employee is unable to work, including by means of telework, for such reason.
  • Additionally, an employee needing leave due to a quarantine order or self-quarantine advice needs to include the name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine, and, if the person subject to quarantine or advised to self-quarantine is not the employee, that person’s name and relation to the employee.
  • Additionally, an employee needing leave due to a school closing or child care provider unavailability needs to include the name and age of the child (or children) to be cared for, the name of the school that has closed or place of care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.
Because the age limitation created by the IRS does not conform with the FMLA or the FFCRA, employers should interpret it only as a documentation requirement. In other words, employers should not use this guidance as a reason to deny public health emergency FMLA leave to those with children over 14. Instead, we recommend that you grant the leave and simply require the employee to document in the written request why the child over 14 requires care.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.

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