New COVID-19 Tax Credit Guidance available from the IRS
By Bello Welsh LLP
The IRS has issued a set of Frequently Asked Questions relevant to the tax credits available for payments made by employers to employees taking leave under the Families First Coronavirus Response Act (FFCRA), enacted on March 18, 2020. Among other things, this guidance states that if an eligible employer that is required to pay qualified leave wages does not have sufficient federal employment taxes set aside for deposit to cover those payments, it can get an advance of the credits by filing a new Form 7200 (instructions available here).
The IRS has also issued a set of Frequently Asked Questions relevant to the separate refundable tax credits available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, for employers incurring payroll costs and experiencing economic hardship related to COVID-19 (referred to as the Employee Retention Credit). Of particular interest may be the questions that relate to how employers can claim the tax credits or get advances on the credits.
More information on the FFCRA, the CARES Act, and other COVID-19 related issues is available on the News & Alerts portion of our website, including a summary of key provisions of the FFCRA, an overview of the CARES ACT (including numerous programs made available to employers), detailed discussion of the Paycheck Protection Program and unemployment related provisions of the CARES Act, and additional analysis of new and existing employer obligations for dealing with the effects of the COVID-19 pandemic.
And as always, you can reach out to any of the attorneys at Bello Welsh LLP for further guidance.