Payroll Chimp, LLC

With the enactment of the American Rescue Plan Act of 2021 (ARPA), employers with fewer than 500 employees may continue to collect tax credits for voluntarily providing expanded leave originally provided under the Families First Coronavirus Response Act (FFCRA). Again, the FFCRA's mandatory leave provisions, requiring covered employers to provide Emergency Paid Sick Leave (EPSL) and Expanded Family and Medical Leave (EFML), expired on December 31, 2020.

The ARPA extends the availability of the tax credits to those employers who qualify and voluntarily provide employees with EPSL and/or EFML through September 30, 2021.

Some of the key changes to the FFCRA-type leave provisions include:
1) The ARPA restarted the bank of hours available for EPSL. Starting April 1 and through September 30, 2021, employer may voluntarily provide a new bank of up to 80 hours of EPSL for which the tax credit will apply.

2) The ARPA expands the existing list of qualifying reasons for EPSL to also include getting a COVID-19 vaccine, recovering from adverse reactions to the vaccine, and awaiting the results of a COVID diagnosis or test after having close contact with a person with COVID-19 or at an employer's request.

3) Starting April 1, the ARPA expands EFML to include all of the same qualifying reasons as EPSL. Also, the ARPA eliminates the requirement that the first 10 days of EFML be unpaid and thus, provides for a total of 12 weeks of paid EFML. The EFML rate continues to be two-thirds of the employee's regular rate, up to $200 per day (regardless of the reason for the leave).

A recap of all qualifying reasons for EPSL and/or EFML:
1) Employee is off subject to a Federal, State or local quarantine or isolation order related to COVID-19.
2) Employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
3) Employee is experiences COVID-19 symptoms and is seeking a medical diagnosis.
4) Employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19, because they have been exposed to COVID-19 or at the request of their employer.
5) Employee is requesting time off to obtain their COVID-19 vaccine.
6) Employee is requesting time off to recover from complications related to receiving their COVID-19 vaccine.
7) Employee is requesting time off to care for someone who is (a) subject to a quarantine order or (b) has been advised to self-quarantine.
8) Employee is requesting time off to care for their child/children whose school or place of care is closed, due to COVID-19 precautions.

Call our office is you have any questions (989) 772-7133 or chat with us below.

We encourage all employers to encourage their employees to use the IRS Tax Withholding Estimator to avoid surprises when filing their 2021 tax return. For any withholding changes employees are required to fill out a new 2021 W-4.

Tax Withholding Estimator | Internal Revenue Service Check your tax withholding with the IRS Tax Withholding Estimator, a tool that helps ensure you have the right amount of tax withheld from your paycheck.