The Association for Main Street
Accountants and Tax Professionals.

Cornoavirus Relief Act Signed
Trump Signs Coronavirus Relief Bill
Small Employer Mandates Sick and Family Leaves

March 18, 2020 -- President Donald Trump signed the “Families First Coronavirus Response Act” which was passed by unanimous consent in the U.S. Senate earlier in the day.

The law requires small businesses defined as those with less than 500 employees to offer 2 week sick pay to those employees who are sick with the Coronavirus and up to an additional 10 weeks of paid family leave for those taking care of family members including children home do to school closure. Employers are to be reimbursed for the expenditure via a payroll tax credit.

Please note that employers with over 500 employees are not subject to the mandate, since Congress felt that these employees already were eligible for sick leave and family leave benefits.


The sick leave portion of the law requires, small employers to provide 100% of the employee’s regular rate for up to two weeks. The relief is capped at $511 per day per employee essentially covering employees up to $132,860. The total payment for the two-week period would be $5,110 (10 days).

Employees are eligible for the sick leave who are quarantining or seeking a diagnosis or preventive care related to COVID-19.


The family leave provision applies when the employee must take care of an eligible family member because of COVID-19. Employer is required to pay 2/3rds of the employees’ regular rate for up to 10 weeks. The employer’s credit is capped at $200 per day per employee. The benefit here maxes out at an annual salary of $78,000. Unlike the sick leave, the family leave is only available after a 2-week waiting period. Accordingly, it is available for weeks 3 through 12.

The employee is eligible for the family leave are those:

-- Adhering to a requirement or recommendation to quarantine because of exposure to or symptoms of the Coronavirus,

-- Caring for an at-risk family member who is required or recommended to quarantine because of the exposure to or symptoms of the Coronavirus, and

-- Caring for a child if the child under age 18 if the school is closed or day care is unavailable because of a public health emergency.

Please Note: If you already paid sick benefits or paid family leave you must use those benefits first before using credit eligible benefits.


The tax relief comes in the form of a payroll tax credit for Social Security taxes paid on qualified paid sick or family leave wages.

The refundable credit equals 100% of qualified paid sick or family leave wages paid each calendar quarter. The credit is allowed against the employer portion of Social Security taxes and applies to amounts paid to employees who are sick or quarantined.

The credit applies to a maximum wage of $511 per day. For employees caring for a family member affected by COVID-19, the credit covers up to $200 a day.

Comparable credits apply to self-employed taxpayers against the self-employment tax. The credit covers 100% of a self-employed individual's sick-leave equivalent amount, or 67% of the individual's sick-leave equivalent amount if they are taking care of a sick family member or taking care of a child following the child's school closing. The sick-leave equivalent amount is the lesser of average daily self-employment income, or $511 per day, to care for the self-employed individual, or $200 per day to care for a sick family member or child following a school closing.

These rules apply only to days occurring during the period beginning on a date selected by the Secretary of the Treasury, which is during the 15-day period beginning on March 18, 2020, and ending on Dec 31, 2020.

This credit will be available when filing 2020 taxes next year. This bill did not include payroll tax cuts or any other direct payments; however, upcoming relief bills may include this type of stimulus.

Other highlights include:

-- COVID-19 testing for those without health insurance.

-- Funding for nutrition assistance programs.

-- $1 billion for emergency grants payable to states for activities related to administering unemployment insurance benefits.

-- VA funding to cover the costs of COVID-19 testing for veterans receiving care through Medical Services or through Medical Community Care.

-- Private health plans are required to cover the cost of COVID-19 testing including the costs of doctor or ER visits.

-- Medicare Part B and Advantage, TRICARE, Medicaid, and CHIP must cover expenses for provider visits where a COVID-19 test is administered or ordered.

Many Thanks to GEAR UP Speaker Tim Sundstrom for providing content for this overview.

Related: Coronavirus Bill Contains Tax Credits for Employers
Related: More Government Details on Coronavirus Relief Act
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