Updated March 25,2020

How sick leave and payroll tax credit rules work

Credit for Family Leave

  • 100% of the “Qualified Family Leave” wages paid by the employer  
  • Employer must have fewer than 500 employees  
  • Provide leave when an employee is unable to work or telework due to a need to care for  
  • a son or daughter under age 18 because the school or place of care has been closed, or the child care provider is unavailable 
  • (Employers with fewer than 50 employees can be exempted from the requirement.) 
  • Up to $200 per day (maximum of $10,000 per employee) 
  • EMPLOYER IS TAXED ON THE CREDIT – meaning no tax deduction for the government-funded portion 

Payroll Tax Credit for Required Sick Leave 

  • 100% of the “Qualified Sick Leave” wages paid by the employer 
  • Employer must have fewer than 500 employees  
  • Required to provide up to 80 hours of paid sick time 
  • Employee is quarantined or self- quarantined, has the virus, or school has been closed 
  • (Employers with fewer than 50 employees can be exempted from the requirement.) 
  • Credit limits 
  • Up to $522 in wages for quarantined or have the virus 
  • Up to $200 for other reasons 
  • EMPLOYER IS TAXED ON THE CREDIT – meaning no tax deduction for the government funded portion