However, the COVID-related Tax Relief Act of 2020 did not amend the EPSLA and Expanded FMLA, and the requirement that employers provide leave expired on December 31, 2020. Specifically, Eligible Employers that voluntarily provide paid sick or family leave to employees that otherwise would have met the requirements of the EPSLA or Expanded FMLA may claim the tax credits for providing the paid leave through March 31, 2021. The COVID-related Tax Relief Act of 2020 amended the FFCRA to extend the period for which Eligible Employers may provide paid sick and family leave to employees after Decemand claim tax credits. The EPSLA and Expanded FMLA requires certain government employers and private employers with fewer than 500 employees to provide paid sick and family leave, respectively, to employees unable to work or telework for periods after March 31, 2020, and before January 1, 2021. Certain self-employed persons in similar circumstances are entitled to similar credits. The FFCRA provides that Eligible Employers providing leave under the EPSLA and the Expanded FMLA are entitled to fully refundable tax credits to cover the cost of the leave paid for these periods of time during which employees are unable to work (which for purposes of these rules, includes telework). Under the FFCRA, employers provide paid leave through two separate provisions: (1) the Emergency Paid Sick Leave Act (EPSLA), which entitles workers to up to 80 hours of paid sick time when they are unable to work for certain reasons related to COVID-19, and (2) the Emergency Family and Medical Leave Expansion Act (Expanded FMLA), which entitles workers to certain paid family and medical leave. Overview of COVID-19-Related Tax Credits for Small and Midsize Businesses (Updated January 28, 2021) Certain self-employed individuals in similar circumstances are entitled to similar credits.įor a more detailed overview of the law, see "Overview of COVID-19-Related Tax Credits for Small and Midsize Businesses," below.įor FAQs, see “ Basic FAQs,” and the sections that follow. The FAQs will be updated to address changes in the law or additional questions as they are raised.
The FFCRA covers the costs of this paid leave by providing small businesses with refundable tax credits. Workers may receive up to 80 hours of paid sick leave for their own health needs or to care for others and up to an additional ten weeks of paid family leave to care for a child whose school or place of care is closed or child care provider is closed or unavailable due to COVID-19 precautions. The FFCRA gives businesses with fewer than 500 employees (referred to throughout these FAQs as "Eligible Employers") funds to provide employees with paid sick and family and medical leave for reasons related to COVID-19, either for the employee's own health needs or to care for family members. The Families First Coronavirus Response Act (the "FFCRA"), as amended by the COVID-related Tax Relief Act of 2020, provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19. These FAQs will be updated as more information becomes available.ĬOVID-related Tax Relief Act of 2020: These FAQs have been updated to reflect the COVID-related Tax Relief Act of 2020, enacted December 27, 2020, which amended and extended the tax credits (and the availability of advance payments of the tax credits) for paid sick and family leave under the Families First Coronavirus Response Act. The American Rescue Plan Act of 2021, enacted March 11, 2021, amended and extended the tax credits (and the availability of advance payments of the tax credits) for paid sick and family leave for wages paid with respect to the period beginning April 1, 2021, and ending on September 30, 2021.
Note:Īmerican Rescue Plan Act of 2021: These FAQs do not currently reflect the changes made by the American Rescue Plan Act. For the most current information on paid leave to employees receiving COVID-19 vaccines see our news release and fact sheet. The ARP tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through September 30, 2021.
Paid Leave Credit for Vaccines – The American Rescue Plan Act of 2021 (ARP) allows small and midsize employers, and certain governmental employers, to claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. This page is being updated on a regular basis with new details.
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