You have an employee who either catches COVID-19 or cares for someone with COVID-19, or is quarantined due to COVID-19 exposure, or who has to keep the kids because school and daycare are gone. Under the Families First Coronoavirus Response Act, you get two things: (1) a credit up to 100% of employer share of medicare and FICA taxes capped at $511 per day or $200 per day of wages paid depending on the reason for the absence. There is also a 10 day per quarter limit. This includes health plan payments as well. The credit is refundable and reduces income. Further, employer still gets the employer FICA and Medicare deduction even though its given back to Employer. The same rules apply for self-employed individuals as well and can be used to reduce self-employment taxes as well.
Additionally, the Medicare and FICA tax paid by employers is also permitted for FMLA leave paid during the quarter up to $200 per day plus health plan expenses paid during the quarter. This credit is limited to 10 weeks. However the credit under this provision is taxable as income, but its offset by these expenses. Again the same rules apply for self-employed individuals.
Also any wages paid to the employee under this Act will not be subject to employee Medicare and FICA tax.
This is being amended as we speak in the current bill before Congress.