UPDATE 3.11.21: President Biden signed the American Rescue Plan Act of 2021 on March 11, further extending federal coronavirus paid leave benefits until Sept. 30, 2021.

The act extends the period during which tax credits are available to eligible employers (under 500 full time employees) that voluntarily provide paid sick and family leave after March 31, 2021.

The tax credit is refundable and initially applied against the Medicare portion of employers’ FICA taxes (1.45%) for qualified wages paid for the period beginning April 1, 2021 and ending Sept. 30, 2021.

This is similar to the tax credit which was available to employers when paid leave was temporarily mandated under the 2020 Families First Coronavirus Response Act.

UPDATE 12.28.20: Congress passed legislation Dec. 21, 2020 that was signed by the president Dec. 27 extending federal coronavirus paid leave benefits until March 31, 2021.

While mandatory benefits expire Dec. 31, 2020, covered employers may voluntarily provide emergency paid sick leave or emergency paid FMLA leave under FFCRA and take the tax credits associated with this leave from Jan. 1, 2021 through March 31, 2021.

The federal Families First Coronavirus Response Act, signed by the president March 18, 2020, allows small and midsized companies (fewer than 500 employees) to use payroll tax credits to provide pandemic-related leave to workers.

The act provides paid sick leave and expanded family and medical leave for COVID-19 related reasons and creates a refundable paid sick leave credit and a paid child care leave credit for eligible employers.

The following questions and answers were provided by the U.S. Department of Labor.






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For more information, contact CBIA's Mark Soycher (860.244.1900) | @HRHotline