March 25, 2020
I hope you and your families are doing well and staying safe & healthy!
Last week, the Families First Coronavirus Response Act was passed by Congress. This Act requires businesses with fewer than 500 employees to provide paid sick and family leave to employees affected by the virus. Details are below:
- Full time workers must receive 80 hours of sick leave and part-time employees must receive pay in the amount of their average hours in a two- week period.
- BENEFITS: There are three levels of eligible employees. Those sick or quarantined would receive full pay up to $ 511 per day for up to 10 days. Those caring for someone affected by the virus would receive 2/3 of their pay up to $ 200 per day for up to 10 days. Individuals with childcare needs due to school or daycare closings will have a 10-day wait period and then receive 2/3 pay up to $ 200 per day, capped at a total of $ 10,000.
- TAX CREDITS: Employers will receive dollar-for-dollar tax credits against Social Security and Medicare taxes due to offset the benefits paid. Those taxes would normally be 6.2% of wages for Social Security and 1.45% for Medicare.
- The self-employed are not left out. They would also receive tax credits against self-employment tax which are the same percentages shown above (6.2% and 1.45%)
As I write this, the Senate has come to an agreement on a separate $ 2 trillion stimulus bill and all indications are that the House will take up the bill immediately. This bill is expected to include several measures that will affect individual income taxes. Once this bill is officially passed, I will provide more details in a separate post.
We are committed to serving your tax preparation and tax planning needs. If you have questions or need assistance, please do not hesitate to contact our office.
Stay safe and well. Our thoughts and prayers are with everyone as we move through this crisis.
David K. Raye, CPA 704-887-5298 [email protected]
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