4/2/20

IRS Issues Guidance on Required Documentation Necessary to Obtain Tax Credits on Paid Sick Leave and Emergency FMLA Leave Requests

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Attorneys & Professionals

The Families First Coronavirus Response Act (FFCRA) requires that most private employers with 500 or fewer employees and most public sector employers provide emergency paid sick leave (PSL) and emergency Family and Medical Leave Act leave (EFML) for specific COVID-19 related reasons.  The Internal Revenue Service has released guidance specifying what documentation is needed for employers to receive the tax credits that will fund the leave.

Employee supporting documentation

The IRS Guidelines require that an employee must provide written documentation containing the following information before taking PSL or EFML: (1) employee’s name; (2) date or dates for which leave is requested; (3) qualifying reason for the leave; and (4) statement that the employee is unable to work (either on-site or via telework) because of the qualified reason for leave.

Employees must also provide additional documentation depending on the reason for taking the PSL or EFMLA:

Additional records and documentation required to obtain the tax credit

In addition to the information set forth above that the employer obtains from employees who make leave requests, the employer must also create and maintain records that include the following information:

IRS Guidelines require that employers retain these records for four years.

Conclusion

The DOL estimates that 61 million Americans will qualify for PSL and/or EFML. To obtain the offered tax credits, Employers must ensure that they are complying with the IRS’s procedures for documenting and substantiating the need for leave. For questions regarding the PSL and EFML requirements, contact your Vorys lawyer.