The American Rescue Plan Act of 2021 (ARPA) extends tax credits available to covered employers who provide qualified sick and family leave wages (within the meaning of ARPA) to their employees between April 1, 2021 through September 30, 2021.
The Internal Revenue Service (IRS) recently updated its FAQs on the Paid Sick and Paid Family Leave credits to now include within the definition of qualified sick and family leave wages, wages paid for leave taken by employees to accompany individuals to COVID-19 vaccination appointments, and to care for individuals recovering from COVID-19 vaccine-related illnesses.
Specifically, the July 29, 2021 updated FAQs make the following key changes:
- Qualified sick leave wages include wages paid with respect to leave taken by an employee to accompany an “individual” to obtain a COVID-19 immunization or to care for an “individual” recovering from any injury, disability, illness, or condition related to the immunization; and
- An “individual” for whom employers may seek to receive a tax credit for providing employees with leave to accompany or care for someone following immunization includes: (1) a family member; (2) someone who regularly resides in the employee’s home; or (3) a similar person with whom the employee has a relationship that creates an expectation the employee would care for that person. The term “individual” does not include persons with whom employees have no personal relationship.
Covered employers paying qualified sick and paid family leave wages (including wages related to immunizations as described above) may be entitled to a tax credit for up to two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s regular rate of pay (up to $200 per day or $2,000 in the aggregate); or a tax credit for up to twelve weeks of paid family leave at 2/3 the employee’s regular rate of pay (up to $200 per day or $12,000 in the aggregate).
Jackson Lewis attorneys will continue to monitor changes in COVID-19 guidance and regulations in the workplace. If you have questions about the American Rescue Plan Act of 2021 or related tax credit issues, please reach out to the Jackson Lewis attorney with whom you often work or any member of our Disability, Leave and Health Management Group or Employee Benefits Group.