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Availability of Tax Credits Under The Families First Coronavirus Response Act

March 23, 2020

By Marilyn Le Lodico, Esquire

Employers seeking to take advantage of the tax credits available under the Families First Coronavirus Response Act that was passed on March 19, 2020 are awaiting guidance from the U.S. Department of Labor on whether employers can receive tax credits for paid leave that was accrued after the Act’s enactment date but before the effective date (between March 19 and April 2).

This guidance is significant because an application of tax credits for employee leave starting from the enactment date would do more to ease the financial burden on employers and keep more employees on payrolls.

Until the U.S. Department of Labor issues guidance and regulations and the effective date is confirmed[1], it is not yet clear whether employers can receive a tax credit paid leave that was accrued before April 2, 2020.


[1] Please note, many news and legal sources are incorrectly reporting that the effective date of the Act is April 2, 2020, because it is 15 days from the date of enactment, March 19, 2020. The Act describes the effective date as “This act shall take effect not later than 15 days after the date of enactment of this Act.” It is possible an effective date earlier than April 2, 2020 will be announced.

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