COVID-19 Employer Playbook

9. Payroll Credit Reporting and Process What

Coordinate between payroll and finance departments to be proactive with tax credits for paid leaves. Estimate expected leave payments and confirm if tax credits will be sufficient or if an expedited refund advance from the IRS will be necessary. Plan for submitting documentation to IRS and for cash flow realities if this is necessary. Payroll tax credits are the method by which employers are “reimbursed” for paid sick time and paid family leave payments to employees.


The first cycle will be Q2 payroll tax deposits.


Essentially all major payroll vendors are creating standardized processing for tax credit reporting. While it has yet to be promised, it is possible that payroll vendors will be able to automate the process for taking the tax credit for COVID-19 leaves.


10. Pre-Tax Plan – A Non-Decision What

Some are advising that plan amendment decisions need to be made on whether (or not) to include the following offerings:

• OTC drugs covered with no prescription required • Menstrual products

Address FSA/HRA plan eligibility for over-the-counter drugs and menstrual products. Frankly, most see this as a non-decision.

We see essentially all plans conforming to allow these enhancements.


Vita Flex plans automatically will include these items as eligible. The Summary Plan Description will be updated to delete the reference to requiring a prescription for OTC drugs to be eligible. An updated SPD will be available online on the participant portal effective April 3, 2020. Some would say that a decision is required, and an amendment should be made to the plan document. Some plans are designed to make such a change automatic and won’t require a formal plan amendment. All VitaFlex plan documents are structured to reference IRS codes for eligible expenses, so no formal decision or plan amendment is necessary.




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