Department of Labor Releases FAQ regarding Families First Coronavirus Response Act (Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion)
Highlights:
- Effective date is April 1, 2020 and applies to leave taken between April 1, 2020 and December 31, 2020.
- Paid leave is not available if the employer sends the employee home and stops paying the employee because there is not work for the employee to do (i.e. layoff). Employee may be eligible for unemployment benefits.
- If an employee is on paid leave when the employer closes, the paid leave stops as of the date the employer closes. Employee may be eligible for unemployment benefits.
- If an employee is furloughed on or after April 1, but the employer remains open, the employee is not eligible for paid leave.
- Leave may be used intermittently with employer’s permission. For example, the employer and employee may agree to have the employee work from home (telework) Monday, Wednesday, and Friday and use paid leave due to the employee’s child’s school being closed or childcare provider unavailable on Tuesday and Thursday.
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Families First Coronavirus Response Act Questions and Answers from the U.S. Department of Labor
Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Passed by Senate, to be voted on by House on March 27th, expected to pass.
Highlights:
- Unemployment
a. Additional $600 per week in Federal Pandemic Unemployment Compensation to every weekly unemployment benefit until July 31, 2020.
b. Additional 13 weeks of federal unemployment benefits for individuals who have exhausted their state unemployment benefits. - Individual
a. Recovery rebates for individuals. $1,200 for single and HOH, $2,400 for married filing joint, additional $500 per qualifying child dependent under age 17. Phaseout begins at $75,000 for single, $122,500 for HOH, and $150,000 for married filing joint. Rebates will be paid out based on 2018 or 2019 tax returns. When a taxpayer files his/her 2020 return, if additional credit is due to the taxpayer based on 2020 information, the additional credit will be refunded. If the taxpayer should have received a smaller credit, the excess credit will not be required to be repaid.
b. Waiver of Required Minimum Distribution rules for 2020, including Required Minimum Distributions that are due by April 1, 2020 because the account owner turned 70 ½.
c. $300 above-the-line deduction for certain charitable donations in 2020.
d. Increased limitation on charitable deduction from 60% to 100% for cash contributions to public charities in 2020. - Business
a. Payroll tax credit for 50 percent of wages paid by eligible employers to certain employees during COVID-19 crisis. Eligible employers are generally those whose operations are fully or partially suspended as a result of a government order limiting commerce, travel or group meetings or who have experienced a greater than 50 percent reduction in quarterly receipts, measured on a year-over-year basis. Credit applies to wages paid after March 12, 2020 and before January 1, 2021. The credit would not be available to employers receiving Small Business Interruption Loans.
b. Deferral of payment of employer portion of certain payroll taxes for 2020 until the end of 2021 and 2022.
c. Modification on Net Operating Loss rules to allow for a five year carryback of NOLs for tax years beginning before 2021. Further, Net Operating Losses would be available to offset 100% of taxable income (rather than the 80% limitation in present law) in tax years beginning before 2021.
d. Removes Limitation on Losses for Taxpayers other than Corporations for tax years beginning before 2021.
e. Corrects the 2017 Tax Law to allow interior improvements to buildings to be immediately expensed (qualified improvement property).
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CARES Summary
Tax Relief Offered by States and Localities
States across the country are responding with their guidelines regarding state-level tax relief.
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State Tax Relief as of 3.27.2020
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-Whitinger & Company