Employer Tax Credit Can Cover 100% of Employee COVID-19 Paid Leave
Did you know eligible employers can receive a 100% refundable tax credit for every dollar of paid leave (plus the employer’s health insurance premiums during leave) provided to employees under the Families First Coronavirus Response Act (FFCRA)? Helping employees afford to stay home and recover can help not only the employee, but also the company, by reducing the chances of COVID-19 workplace infections.
Through the FFCRA tax credits, businesses with fewer than 500 employees are offered funds to provide employees with paid sick and family and medical leave for reasons related to COVID-19. Leave can be either for the employee’s own health needs or to care for family members. Tax credits apply to those wages paid for leave during periods beginning on April 1, 2020 and ending on December 31, 2020. Certain self-employed individuals in similar circumstances are entitled to similar credits. For more information, the IRS offers answers to Frequently Asked Questions about the tax credits.
Can the Tax Credits Really Help?
Erin Jenkins Banas, Vice-President of Jenkins Landscape and Vice-President of the Treasure Coast Chapter of the Florida Nursery, Growers, and Landscapers Association (FNGLA), shared how her company has made use of the tax credits to help affected employees stay home and prevent workplace spread of COVID-19 infections:
“Jenkins Landscape does qualify as a covered employer. Employees who were out due to COVID-19 or related reasons were able to qualify for up to 80 hours of paid leave. This was very helpful for our business because some of our employees were out of PTO or have not yet accrued any PTO. They were then able to stay home and still collect their wages.
We generated a new QuickBooks payroll item to track this time, so that when we filed our quarterly 941 we were able to receive a credit back on those wages paid.
We have been continuously communicating to our employees to NOT come to work sick because they do qualify for this pay. If the FFCRA paid leave was not available and those employees did not have any PTO, then they most likely would have come into work sick.
Employers do need to make sure they keep documentation of the leave. Our insurance agent was able to provide us with an Emergency leave request template. This form lists the qualifying reasons for leave and has the employee check off the reason and include dates out of work. There is also a return to work form that states the employee is healthy and clear to return to work. “
– Erin Jenkins Banas
Agribusiness employers seeking to learn more can find additional resources to weather the coronavirus pandemic by visiting the CDC website, Florida Department of Health, or reading some of our other UF/IFAS Extension coronavirus blogs for agribusinesses.