On March 18, 2020, President Trump signed into law the
Families First Coronavirus Relief Act (Act). The Act has many provisions
impacting individuals, families, employees and employers. See our March 19,
2020 E-Focus, “Focus on Taxation: President Signs into Law Coronavirus Relief
Many of these benefits are provided by amending the Family and Medical
Leave Act of 1993 (FMLA). The FMLA is administered by the Department of Labor
and is beyond the scope of RubinBrown’s practice. While it is clear that the
original FMLA generally only applied to governmental employers and employers
with 500 or more employees, it appears that the expanded benefits related to
the Coronavirus outbreak are applicable to all entities that employ less than
500 employees. An exemption from the paid leave requirements related to school
closings or child care unavailability is permitted for employers with less than
50 employees is available if paying the benefits would jeopardize the ability
of the business to continue. The IRS is going to issue additional emergency
guidance to clearly articulate this exemption later this week.
The Families First Coronavirus Relief Act does provide tax credits for employers required to
pay benefits under the Act. The calculation of these credits is described in
the above referenced E-Focus on the Coronavirus Relief Act. These credits are
available against the employer portion of all Social Security payroll taxes,
the employees’ portion of the all Social Security payroll taxes, as well as the federal income tax withheld from all employees’ wages. Any excess credits can
be refunded to the employer. The IRS expects to issue these refunds in two
weeks or less. The processes and timing of applying the credit to the employer’s
payroll tax liabilities and for receiving refunds of the excess amounts will be
issued by the IRS later this week.
The Family And Medical Leave Act Employer Guide published by the
Department of Labor that may be useful in helping organizations answer questions
related to the FMLA of 1993 rules. The IRS announcement regarding
implementation of the Act may also provide additional information.
In addition to the Families First Coronavirus Relief Act, other support may be available to
not-for-profit organizations during this challenging time through the U.S.
Small Business Administration (SBA). The SBA has released updated criteria
for states requesting disaster assistance loans for small businesses, which
includes not-for-profit organizations, impacted by Coronavirus.
organizations may be eligible for SBA’s Economic Injury Disaster Loans, which
offer up to $2 million in assistance. These loans can provide vital economic
support to not-for-profit organizations to help overcome the temporary loss of
revenue they are experiencing in the current environment. These loans may be
used to pay fixed debts, payroll, accounts payable and other bills that cannot
be paid due to the impact of the disaster. The interest rate on these loans is
2.75%. Terms are determined on a case-by-case basis, based on each borrower’s
ability to repay. SBA offers loans with long-term repayments up to a maximum of
For more information or if you have questions regarding the impact of Coronavirus on your organization, please contact one of RubinBrown's Not-For-Profit professionals.
Readers should not act upon information presented without individual professional consultation.
Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.