Coronavirus Advisory: IRS and DOL Guidelines & Emergency Stimulus Bill

The IRS is set to issue additional guidance this week concerning the availability of tax credits for leave payments made under the FFCRA. In addition, the Department of Labor (DOL) has clarified how certain provisions of the law apply.

• IRS Tax Guidance
• Department of Labor Leave Guidance

Forthcoming guidance from the IRS will include the following: 

1. Employers subject to the provisions of the FFCRA will receive 100% reimbursement for leave payments made under the provisions of the law. Health insurance premiums are included in the credited amount.
2. There will be two mechanisms to enable credits to be received:
   • A dollar-for-dollar offset against payroll tax.
   • A payment from the IRS, where applicable.
3. There will not be payroll tax liability for payments made under the provisions of the law.
4. Companies are permitted to withhold funds that would ordinarily be paid to the IRS in payroll tax in order to capture the tax credits for the leave payments. If these amounts are insufficient to cover the cost of leave payments under the law, an advance may be requested from the IRS. Additional IRS guidance on requesting an advance is expected this week.
5. Employers with less than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the viability of the business would otherwise be jeopardized.

Coronavirus Stimulus Package Expected

On Wednesday, March 25, The White House and United States Senate reached a deal on a bill that would deliver $2 trillion in government relief to combat the economic and public health impact of the Coronavirus pandemic. If passed, the legislation would be the largest emergency economic aid package in US history.

The package is expected to include $500 billion in loans for distressed companies, $250 billion in direct payments to individuals, and $350 billion in small business loans. The Senate is expected to vote on the deal Wednesday afternoon, with the House expected to receive the bill on Thursday.

As new information is made available regarding the pending stimulus package, we will continue to provide you with updates and analysis. 

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