IRS Updates Tax Credit Guidance and DOL Updates FAQ for Coronavirus Paid Leave

The IRS has updated tax credit questions and answers regarding coronavirus (COVID-19) paid leave.

Visit the IRS website for their FAQ section:

IRS: COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs

Also, the DOL has updated their FAQ section by adding nine additional questions and answers (Questions 80-88) to their guidance related to leaves taken under the FFCRA. Among other things, the new guidance provides clarification on the following issues:

  • To calculate the available paid sick leave hours for an employee who works irregular hours, the employer would determine the average number of hours the employee was scheduled to work each calendar day in the prior six-month period. To calculate the available expanded FMLA leave for an employee who works irregular hours, the employer would use the average number of hours the employee was scheduled to work each workday (not calendar day).
  • When determining an employee’s rate of pay for FFCRA leave purposes, the employer would look at the employee’s average rate for the prior six month period. The employer would include only hours worked, not leave hours. Any period of zero hours worked would be disregarded for the purpose of calculating the employee’s regular rate of pay.
  • An employer may not require an employee to use employer provided paid leave (such as vacation, personal time or PTO) concurrently with emergency paid sick leave under the FFCRA. However, an employer may require that an employee use any available accrued paid leave provided by the employer concurrently with expanded FMLA leave. The employee could receive 100% pay under this scenario, but the employer would only receive a tax credit for 2/3 of the employee’s normal wages up to $200 daily maximum.

U.S. Department of Labor: Families First Coronavirus Response Act: Questions and Answers

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