- The new law extends the FFCRA paid sick time and paid family leave credits beginning April 1, 2021 and ending on September 30, 2021. Previously were set to expire on March 31, 2021. The amendments apply to amounts paid with respect to calendar quarters beginning after March 31, 2021.
- The amendments apply to amounts paid with respect to calendar quarters beginning after March 31, 2021.
- The amount of wages for which an employer may claim the paid family credit in a year is increased from $10,000 to $12,000 per employee.
- Paid sick and paid family leave credits may each be increased by the employer’s share of Social Security tax (6.2%) and employer’s share of Medicare tax (1.45%) on qualified leave wages.
- Penalties for failure to deposit “applicable employment taxes” can be waived if the failure to deposit is due to an anticipated credit. Code Sec. 3131(f)(1) and Code Sec. 3132(f)(1) define “applicable employment taxes” as the employer’s share of Medicare or Tier 1 RRTA tax.
- Expands the paid family leave credit to allow employers to claim the credit for leave provided for the reasons included under the previous employer mandate for paid sick time.
- Permits the paid sick and family leave credit to be claimed by employers who provide paid time off for employees to obtain the COVID-19 vaccination or recover from an illness related to the immunization.
- Increases the paid sick and family leave credit by
- 1) the cost of the employer’s qualified health plan expenses and
- 2) the employer’s collectively bargained contributions to a defined benefit pension plan and the amount of collectively bargained apprenticeship program contributions.
- Non-Discrimination- no credit will be permitted to any employer who discriminates in favor of highly compensated employees as defined under Code Sec. 414(q), full-time employees, or employees on the basis of employment tenure.
- No double benefit- Provides that any wages taken into account in determining the paid sick and family credit allowed under may not be included for the purposes of determining the credits under other code sections (45A, 45P, 45S, 51, 3132, 3134).
- Resets the 10-day limitation on the maximum number of days for which an employer can claim the paid sick leave credit with respect to wages paid to an employee. The current 10-day limitation runs from the start of the credits in 2020 through March 31, 2021. The reset would begin April 1, 2021.
Self- Employed Provisions:
- Self-Employed- resets the 10-day limitation on the maximum number of days for which a self-employed person can claim the paid sick leave credit with respect to wages. The 10-day reset applies to sick days after January 1, 2021 for self-employed individuals.
- Increases the number of days for which self-employed individuals can claim the paid family leave credit from 50 to 60.