Small Businesses to Get COVID-19 Paid Leave Help

New rules to help employers keep workers on the payroll

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As the coronavirus pandemic and worker layoffs have challenged small businesses, the federal government is offering assistance to keep workers on the payroll.

The Families First Coronavirus Response Act, which applies to businesses with fewer than 500 employees, lets workers receive paid sick leave, while employers get tax credits to handle that paid leave. Here’s how it works, according to the U.S. Department of Labor and the Internal Revenue Service.

For Employees

Employees can receive up to 80 hours of paid sick leave at 100% of their regular pay if unable to work due to quarantine or if experiencing COVID-19 symptoms and seeking a diagnosis.

Paid leave at two-thirds of regular wages may be available for employees caring for a person under quarantine, caring for a child whose school is closed, or in a substantially similar situation. A person unable to work due to the child care provision could receive an additional 10 weeks of paid leave at two-thirds of regular pay.

For Employers

Two new tax credits are available to businesses. The paid sick leave credit gives employers a refund at regular pay up to $511 per day for up to 10 days for employees in quarantine or with COVID-19 symptoms.

For paid leave related to child care, employers can be reimbursed for two-thirds of regular pay up to $200 per day for 10 days. They can get an additional tax credit to maintain health insurance for the employee during the leave.

The second credit provides relief for covering paid leave for workers using the additional 10 weeks for child care. The rate is two-thirds of pay up to $200 per day, to a maximum of $10,000.

To use the credits immediately, businesses can use funds for the paid leave that otherwise would be paid in payroll taxes. This includes withheld income tax and the employee and employer shares of Social Security and Medicare. If those do not cover the cost of paid leave, employers can ask the IRS for an expedited advance. The IRS plans to process those claims within two weeks.

Employers can claim the tax credits between April 1 and Dec. 31, 2020.

Businesses with fewer than 50 employees can receive exemptions from the child care paid leave if those requirements would jeopardize their ability to continue.

All paid leave amounts are also available to self-employed people under similar circumstances. Credits are claimed on the income tax return. Find out more at   


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