Article Link: http://exchangepress.com/article/payroll-pitfalls-and-coronavirus-navigating-tax-benefits-and-program-during-covid-19/5025481/
The coronavirus pandemic has disrupted many early child care providers. Fortunately, lawmakers have created a variety of tax benefits for employers and employees alike, ranging from tax credits for retaining workers to payroll tax delays. Unfortunately, there are also quite a few potential pitfalls everyone should be aware of.
Employer Retention Credits
The Coronavirus Aid, Relief and Economic Security Act contained a credit against payroll taxes for wages paid to employees in 2020. The credit, a reduction in the operation’s tax bill rather than a deduction from the income that tax bill is based on, is available to family child care centers and providers that were forced to shut down or suspend operations due to the coronavirus outbreak. The refundable credit equals 50 percent of the first $10,000 of qualified wages paid to an employee from the period of March 12, 2020, through December 31, 2020. It should be noted, however, that an employer cannot claim both the employee retention credit and the family and medical leave credit for the same wages.
Payroll Tax Delay
The CARES Act also allowed early child care providers affected by the coronavirus pandemic to defer payroll taxes that would normally be due in 2020. This applies to the ...