Paid sick and family leave tax credits under the American Rescue Plan Act of 2021 (ARP) are available to eligible employers for providing leave to employees to accompany a family member, household member or certain other individuals to obtain or recover from the COVID-19 immunization.

Eligible employers can tax credits for the cost of providing paid sick and family leave for reasons related to COVID-19 including qualified leave wages and certain other wage-related expenses (such as health plan expenses and certain collectively bargained benefits). The ARP tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through Sept. 30, 2021. Self-employed individuals are eligible for similar tax credits.

Eligible employers include businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers that voluntarily decide to provide emergency paid sick and/or family leave according to the otherwise-expired standards in the Families First Coronavirus Response Act’s (FFCRA) Emergency Paid Sick Leave Act (EPSLA) and Emergency Family Medical Leave Expansion Act (EFMLEA). The ARP amends and extends these credits to leave taken beginning April 1, 2021, through September 30, 2021.

FAQs containing information on how eligible employers may claim the paid sick and family leave credits, how to file for and compute the applicable credit amounts, and how to receive advance payments for and refunds of the credits are available at the IRS website.

Matters relating to paid leaves can be complex, so employers should consult with counsel if they have questions about paid leaves and credits. Contact us at Chase Law Group to schedule a consultation.