Timing of Credit Tax credits are computed on a quarterly basis and are available for Q2, Q3, and Q4 2020. Because of the effective date (15 days after action by the Secretary), enactment will take too long for the credit to have any application in Q1. No Double-Dipping on Tax Credits To the extent that a covered employer elects to receive the credit, the tax credit amount must be considered as income to the employer. This effectively eliminates any potential double tax benefit because the employer will have deducted the sick leave wages it paid. Wages and Taxation The qualified sick leave wages paid are not “wages” for the employer-portion of the Social Security tax. The legislation has no effect on the employee portion of the Social Security tax, nor does it have any effect on employer or employee-portion of the Medicare tax. More Details and Guidance The DOL has indicated that regulations will be promulgated by April 2020. Everyone wishes for sooner rather than later, and the DOL is well aware of the urgency. Effective Date and Duration The effective period for sick leave tax credits and FMLA paid family leave is April 1, 2020 through December 31, 2020. The law does not extend any provisions retroactively, so any leave taken before that date will not be considered leave provided under the FFCRA, and thus payments are not eligible for tax credits.
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