On March 20, 2020, the IRS issued additional administrative guidance to employers and their tax accountants on the mechanics of using tax credits for small and midsized businesses for the cost of providing COVID-19 related paid leave to employees. The highlights include:

• Employers may keep, rather than deposit, the payroll taxes due in an amount equal to the employer’s cost of qualifying sick and childcare leave paid.
• Less waiting time for payroll tax refund. A new refund request form is coming soon that may be filed immediately to cover employer costs of qualified sick or childcare leave if the costs exceed payroll withholdings due. Refunds should be processed within 2 weeks.
• 30-day non-enforcement period for good faith compliance efforts.

The IRS plans to release additional information on the process for employers to receive an advance payment for the credit. We will keep you posted.

By Jeffrey D. Trevillion, Jr., jtrevillion@dsda.com