IRS Issues Initial Guidance on Paid Leave Tax Credits

Today, March 24, 2020, the Internal Revenue Service published a news release describing their approach to implementing the new federal paid leave tax credits. The guidance provides several examples and states that more information will be forthcoming in the next week.

By way of reminder, on March 20, the U.S. Treasury Department, the Internal Revenue Service, and the U.S. Department of Labor announced that small and midsize employers covered by the new Families First Coronavirus Response Act can begin to take advantage of two new refundable payroll tax credits that are designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing federally mandated COVID-19-related leave to their employees.  Such reimbursement will take the form of a tax offset against payroll taxes.

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