The IRS, lining up with the Department of Labor’s start date for the mandatory sick time related to COVID-19 that was enacted in the Families First Coronavirus Response Act, has announced in Notice 2020-21[1] that the effective date for the refundable payroll tax credit is April 1.

Thus, employers will first qualify for the payroll tax credits, and self-employed individuals for the credit for self-employment taxes, for leave beginning April 1, 2020. No credit will be allowed for any such leave taken before that date.

The Notice states:

With respect to the period "beginning on a date selected by the Secretary (or the Secretary's delegate) which is during the 15-day period beginning on the date of the enactment of this Act” as specified in sections 7001(g), 7002(e), 7003(g), and 7004(e) of Division G of the Act, the date selected by the Secretary is April 1, 2020. This date is coordinated with the DOL's determination of the effective date for employers' compliance with the Emergency Family and Medical Leave Expansion Act and Emergency Paid Sick Leave Act requirements. Accordingly, the refundable tax credits for employers apply to qualified sick leave wages and qualified family leave wages paid for the period from April 1, 2020 to December 31, 2020. Additionally, the self-3 employment tax credit is determined based on days occurring during the period beginning on April 1, 2020, and ending on December 31, 2020.

[1] Notice 2020-21, March 27, 2020, https://www.irs.gov/pub/irs-drop/n-20-21.pdf (retrieved March 28, 2020)