27 Jan Consolidated Appropriations Act of 2021: Paid Family and Medical Leave & Paid Sick Leave
The Consolidated Appropriations Act, 2021 extends the credit for coronavirus related paid sick and family leave, originally part of the Families First Coronavirus Response Act, through March 31, 2021. The Families First Coronavirus Response Act (Act) provides paid sick leave and expands family and medical leave for COVID-19 related reasons and creates the refundable paid sick leave credit and the paid family leave credit for eligible employers.
Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Families First Coronavirus Response Act. Eligible employers can claim these credits based on the qualifying leave they provide between April 1, 2020 and March 31, 2021. Equivalent credits are available to self-employed individuals based on similar circumstances.
Paid Family Leave Credit
An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19 is entitled to an additional 12 weeks of emergency family and medical leave (paid family leave benefits). Two weeks of this may be unpaid, but the remaining 10 weeks must be paid at two-thirds of the regular rate of pay up to a maximum of $200 per day and $10,000 in aggregate.
Paid Sick Leave Credit
Employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. The credit is limited to the employee’s regular rate of pay, up to $511 per day for a total of 10 days, up to an aggregate of $5,110.
For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day for a total of 10 days, up to an aggregate of $2,000.
Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
These provisions also apply to self-employed taxpayers and self-employed taxpayers with employees may get credits under bother the employer rules and the self-employed rules.