The Senate Passes COVID-19 economic relief package to combat pandemic.

On Wednesday 18 March 2020, the US Senate passed an economic stimulus plan designed to help employers cushion the impact of the COVID-19 outbreak on themselves and their employees. The act expands the Family and Medical Leave Act and introduces specially designed paid sick leave, covering employees who are sick with the virus as well as those serving as caregivers for others with the virus. This act provides two payroll tax credits for businesses with fewer than 500 employees effective April 2, 2020. In addition to the credits described below, the act includes free virus testing, expands unemployment insurance and provides food assistance to those affected by the virus.

Sick Leave Credit – this credit is for eligible employees that are taking sick leave because the employee is:

• Subject to a federal, state or local quarantine order related to COVID-19:
• Advised by a health care provider to self-quarantine due to COVID-19;
• Experiencing COVID-19 symptoms and seeking medical diagnosis;
• Providing care for an individual subject to a federal, state or local quarantine order or advised by a health care provider to self-quarantine due to COVID-19 concerns;
• Caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency; or
• Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

The credit cannot exceed $511 per employee per day and is limited to 10 days or 80 hours of sick pay leave. It remains in effect for wages paid through December 2020. The employer cannot use this credit in connection with wages for which the employer is currently receiving the employer credit for paid family and medical leave enacted by the Tax Cuts and Jobs Act.

Self employed individuals also qualify for credit up to the lesser of the self-employment tax on their average daily self-employment income or $511 per day if caring for themselves and $200 if caring for a family member. This credit limit is also 10 days.

On a quarterly basis, the credit is limited to the total tax liability on the employer portion of the social security payroll tax. In certain circumstances the credit can be refundable.

Emergency Family & Medical Leave Expansion Act – The Act amends and expands the family and medical leave act (FMLA) temporarily. Currently only employers with 50 or more employees were covered under FMLA. This change now covers employers with less than 500 employees. Any individual employed by the employer for at least 30 days (before the first day of leave) may take up to 12 weeks of job-protected leave. Employees who meet any of the following circumstances qualify:

• Quarantine because of exposure or symptoms related to COVID-19;
• Provide care to a quarantined family member;
• Provide care for child younger than 18 whose school or day care has closed due to COVID-19

We are making every effort to stay on top of this very fluid situation. Please call or email with questions you may have, info@wernercpa.net or 610.770.9236.