Last week, Congress and President Biden enacted the American Rescue Plan Act (ARPA) of 2021. ARPA has widespread effects on many areas of the economy and has resulted in stimulus checks for many qualifying Americans.
ARPA also extended relief available to employees under the Families First Coronavirus Response Act (FFCRA). To see our original article detailing FFCRA Leave, please click here.
Mandatory FFCRA leave ended on December 31, 2020. However, if employers choose to continue to provide the FFCRA leave, they will receive tax credits that may financially benefit the employer. Tax credits are available until September 30, 2021 and cover ten days of paid leave.
FFCRA Leave Reset
Previously, FFCRA paid sick leave covered only ten days of work and employees were not eligible for a second ten days. However, on April 1, 2021, those days reset. As such, employers will be able to receive tax credits for an employee that has already been given ten days of paid FFCRA leave prior to April 1, 2021, if the employer chooses to continue to provide the voluntary leave to its employees.
Expansion of Qualifying Reasons for FFCRA Leave
In addition to the original reasons FFCRA ARPA provides three new reasons for employees to seek FFCRA leave. The first reason applies when an employee is waiting for the results of a COVID-19 test after having been exposed to the virus or if the employer is requiring the employee to take a test. The second new reason permitted for taking FFCRA leave applies when an employee is getting a COVID-19 vaccine. The third new circumstance that permits an employee to take FFCRA leave occurs when an employee is recovering from the effects of a COVID-19 vaccine.
Tax Credit Availability
Paid leave tax credits are capped at $511 per day for employees if the leave is taken for any of the new qualifying reasons; if the leave is taken because the employee has to quarantine or isolate due to government order or medical instruction; or if the leave is taken because the employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis.
Pead leave tax credits are capped at $200 per day when employees take leave to care for another individual who is ill with COVID-19 or to care for a child whose care arrangements had changed due to COVID-19.
Tax credits for employers are capped at $12,000 per employee, replacing the previous $10,000 cap.