Did you know that when an employee is out sick related to "Covid", that you can claim tax credits equal to or nearly equal to some of the pay?
We can set the codes up in our software, upon request. Please give us up to 72 hours.
When you then pay an employee for Covid-Sick or Covid-Family pay, you can get a reduction of IRS taxes right on the same payroll! The Covid-FMLA is less frequently used and can be setup as well.
The Department of Labor has a good write up here:
https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave
1) COVID-19 Sick: Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined.
2) COVID-Family: Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age)
3) COVID-FMLA: Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
How To Select the Code to Use
Please know, we don't consult on WHEN to use the pay codes. It's a bit of reading, and we don't interpret for legal liability and that it's an HR topic to decide when to use it. The credits are payroll and we make sure we get those for you right away on the current payroll run!
IRS FAQs on the Tax Credits
Here is an FAQ from the IRS:
https://www.irs.gov/newsroom/covid-19-related-tax-credits-basic-faqs
Use this IRS link to determine which pay type to use and see the tax credits you get:
These two sections in the link outline the credits:
Determining the Amount of the Tax Credit for Qualified Sick Leave Wages. (Covid pay in our system)- Determining the Amount of the Tax Credit for Qualified Family Leave Wages (Covid FMLA in our system)
When we use the code in our system, it gives you the correct tax credits.