If you’re a small business owner during the pandemic, you know that one of the major struggles has been continuing to keep employees on your payroll and offer them the leave they need to respond safely to Covid-19. The IRS has offered a few incentives with the purpose of helping you take care of your employees during this trying time.
What Assistance is Available?
The Families First Coronavirus Response Act (FFCRA) that was passed in March of 2020 required businesses with 500 employees or less to provide up to 2 weeks of additional sick leave for their employees that had to miss work due to certain circumstances related to Covid-19. Employers who willingly provided this extra leave to their employees were also offered tax credits to offset the financial burden of keeping their employees on the payroll.
The IRS recently released a notice with the purpose of helping small businesses benefit from these tax credits by giving them access to the funds when they need them. Employers who qualify can now use some of the Employment taxes that they would have given to the IRS to instead pay for their employees’ required sick leave or family leave.
Employers can use these funds to pay their employees in anticipation of receiving one or more of the tax credits offered in the FFCRA.