PH COVID-19 Client Alert Series: When Can Employers Claim Payroll Tax Credits For Coronavirus-Related Leave?
By Stephen Turanchik, Joseph Opich, Michael Rosella & Lauren Smith
On March 18, 2020, President Trump signed into law the
For a detailed discussion of the paid leave and payroll tax credit provisions of the Act, see
The stated effective date of the paid leave provisions of the Act is “not later than 15 days” after enactment—on or before April 2, 2020.
However, in News Release IR-2020-57, which was published on March 20, 2020, the IRS stated:
Today the U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees.
Emphasis added. This language would seem to suggest that employers could begin claiming the tax credits for the cost of providing Coronavirus-related leave as of March 20, 2020. However, taxpayers have also been advised that they cannot rely upon IRS Publications, News Releases or Frequently Asked Questions.
On March 24, 2020, the U.S. Department of Labor has published Frequently Asked Questions that provides that the FFCRA’s paid leave provisions are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020.
Treasury has indicated that the credit will only be available to compensate leave paid after the effective date that it will set in forthcoming guidance.