The American Rescue Plan Act of 2021 (ARPA), enacted March 11, 2021, amended and extended the tax credits (and the availability of advance payments of the tax credits) for paid sick and family leave for wages paid with respect to the period beginning April 1, 2021, and ending on September 30, 2021.
The original Families First Coronavirus Response Act (FFCRA) provisions for Emergency Paid Sick Leave (EPSL) and Emergency Paid Family and Medical Leave(EPFL), as modified by the Consolidated Appropriations Act of 2021, apply to leave taken between April 1, 2020, and March 31, 2021.
As a reminder, FFCRA and now its extension under ARPA only apply to employers with fewer than 500 employees.
The ARPA made the following changes, in addition to extending FFCRA Paid Sick and Family Leave tax credit for the wage paid with respect to the period beginning April 1, 2021, through September 30, 2021:
- The 10-day maximum amount of paid sick leave permitted from April 1, 2020, through March 31, 2021, will reset on April 1, 2021, allowing a new 10-day maximum of paid sick leave.
- The maximum amount of wages that may be considered per employee for paid family leave increased from $10,000 to $12,000.
- The worker is getting a COVID-19 vaccine.
The employee is recovering from complications due to receiving the vaccine.
Please note that the FFCRA provision is based on the date(s) that the employee uses the Emergency Paid Sick Leave or Emergency Paid Family and Medical Leave.
Under the FFCRA limit, leave must be taken and paid on or before March 31, 2021, to be reported on the 1Q21 Form 941. If the leave is taken on or before September 30, 2021, and not paid until after September 30, 2021, it will be reported on the 3Q21 Form 941 and the ARPA rules and limits will apply.