U.S. IRS Publishes Much-Anticipated Guidance on Documents that Employers Must Retain Under the Families First Coronavirus Response Act
April 1, 2020
Authored by: Lily Kurland and Christy Phanthavong
The Families First Coronavirus Response Act (“FFCRA”), which generally requires U.S. employers with fewer than 500 employees to provide paid sick leave (“Paid Sick Leave”) and emergency family and medical leave (“Emergency FMLA Leave”) benefits to employees in connection with COVID-19, officially goes into effect today. This also means that employers are now able to immediately seek a quarterly payroll tax credit equal to 100% of the qualified Paid Sick Leave and Emergency FMLA Leave wages paid to employees under the FFCRA.
As we summarized in an earlier post, this past weekend the Department of Labor (“DOL”) revised its guidance to refer employers to the Internal Revenue Service (“IRS”) for questions regarding what documentation employers must retain in order to receive a tax credit. Late on March 31, 2020, the IRS published this much-anticipated guidance. Below are highlights from the IRS’s guidance on document collection and retention for employers to consider as they begin to comply with the FFCRA. Summaries of other aspects of the IRS’s guidance will be available soon.
- Leave for Which Tax Credits are Available: The IRS guidance confirms that tax credits are available only for Paid Sick Leave and Emergency