COVID Related Tax Credits, Cuts, and Deductions for Small Businesses
Navigating the information available regarding tax credits, cuts, and deductions can be overwhelming, but the information below is organized to help you sort through and determine what matters most.
The FFCRA provides businesses with tax credits to cover certain costs of providing employees with required paid sick leave and expanded family and medical leave for reasons related to COVID-19, from April 1, 2020, through December 31, 2020.
Eligible Employers may claim tax credits for qualified leave wages paid to employees on leave due to paid sick leave or expanded family and medical leave for reasons related to COVID-19 for leave taken beginning on April 1, 2020, and ending on December 31, 2020.
Eligible Employers will claim the credits on their federal employment tax returns (e.g., Form 941, Employer's Quarterly Federal Tax Return), but they can benefit more quickly from the credits by reducing their federal employment tax deposits. If there are insufficient federal employment taxes to cover the amount of the credits, an Eligible Employer may request an advance payment of the credits from the IRS by submitting a Form 7200, Advance Payment of Employer Credits Due to COVID-19. The IRS expects to begin processing these requests during April 2020.
There is plenty of further, extensive information available. The following are good starting points for further specific research for your small business.
COVID-19 Related Tax Credits: Official Guidance From The Government Regarding Tax Deductions - from the Internal Revenue Service
IRS Issues Guidance on Tax Credits For Coronavirus Paid Leave
COVID-19 and the American Workplace - from the US Department of Labor
Massachussetts Government Administrative Tax Relief Measures