According to the DOL at: https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave:
The Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The Department of Labor’s (Department) Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements.
These provisions will apply from the effective date through December 31, 2020. Generally, the Act provides that covered employers must provide to all employees:
- Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis;
- Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition. (Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.)
Practice owners get reimbursed for this mandatory sick leave by holding back the money from the federal payroll tax deposit they make along with each payroll run. If your payroll tax deposits aren’t sufficient to pay back your practice for the full amount of FFCRA wages paid, simply file a Form 7200 (https://www.irs.gov/pub/irs-pdf/i7200.pdf) with the IRS to receive an advance payment equal to the amount those excess FFCRA wages exceed the available payroll tax deposits.
Here is the example from the IRS Instructions for this form:
$5,000 for qualified sick leave wages, certain related health plan expenses, and the employer’s share of Medicare tax on the leave wages and is otherwise required to deposit $8,000 in employment taxes, the employer could reduce its federal employment tax deposits by $5,000. The employer would only be required to deposit the remaining $3,000 on its next regular deposit date. If an employer is entitled to an employee retention credit of $10,000 and was required to deposit $8,000 in employment taxes, the employer could retain the entire $8,000 of taxes as a portion of the refundable tax credit it is entitled to and file a request for an advance payment for the remaining $2,000 using Form 7200.
If you are eligible for an Advance Payment of Employer Credits Due to COVID-19, please notify our payroll team or your payroll processor.