HMM’s tax department has some recommendations in order to gather and maintain supporting documentation for any tax deductions or credits claimed.
Differentiating COVID-19 related leave:
We recommend creating 3 categories to differentiate between the allowable COVID-19 related leave:
- Sick/Quarantined: Employees who either have tested positive for COVID-19 or told to quarantine/isolate because of direct contact with someone with COVID-19. These employees are eligible for up to 80 hours of pay at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 over a 2 week period.
- Sick Family/Household Member: Employees who take leave to care for someone in their household who have been diagnosed with COVID-19. These employees are eligible for up to 80 hours of pay at 2/3 of their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 over a 2 week period.
- Childcare/FMLA: Employees who take leave to care for a child whose school or usual caregiver are not available as a result of the COVID-19 pandemic. These employees are eligible for up to 12 weeks of leave (2 weeks of paid sick leave followed by up to 10 weeks of paid expanded family & medical leave) at 2/3 of their regular pay rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 over a 12 week period.
Covered employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the Families First Coronavirus Response Act.
Documenting COVID-19 related leave:
For each employee taking COVID-19 related leave, we recommend the following documentation be gathered and kept as part of the employee file:
- Employee Name
- Dates of COVID-19 related leave
- Classification of COVID-19 related leave (one of the three categories noted above)
- Written statement from the employee stating that they are unable to work (in person and/or telework) due to one of the qualified reason
In the aforementioned written statement, we recommend the following information be included as applicable:
- If the employee is under a quarantine or isolation order, the statement should include the name of the Doctor/Government Entity who issued the isolation order as well as the length of the order. A copy of the isolation order should be included in the file.
- If the employee is on leave for the care of a sick family/household member, the statement should include (a) the name of the person being cared for, (b) their relationship to the employee, (c) the name of the Doctor/Government Entity who issued the isolation order, and (d) the length of the order. A copy of the isolation order should be included in the file.
- If the employee is on leave for the care of a child, the statement should include (a) the name of the person being cared for, (b) their relationship to the employee, (c) the name school or place of care which is now closed due to COVID-19, and (d) a statement noting that no other person is available to care for the child. If the child in question is over 14 years old, we recommend the statement include additional detail regarding the circumstances which necessitate the leave.
We will provide additional updates as new or updated information becomes available. Please contact our office with any questions or concerns.
