Congress Extends Employer Tax Credits for Paid Sick and Family Leave

On December 21, Congress passed the Consolidated Appropriations Act. While this bill does not extend mandated FFCRA leave beyond December 31, 2020, Section 286 of the bill, “Extension of Credits for Paid Sick and Family Leave,” allows covered employers to voluntarily provide emergency paid sick leave or emergency paid FMLA leave under FFCRA and claim the tax credit associated with this leave. The tax credit may only be taken for leave through March 31, 2021. Note, however, the bill does not increase the amount of leave available to employees under the FFCRA. Therefore, employers cannot claim the tax credit for employees who have already used all of their FFCRA leave entitlement.

In summary, FFCRA leave is no longer required as of January 1, 2021, but if covered employers voluntarily provide leave benefits to eligible employees through March 31, 2021, employers are eligible to take the tax credit for the leave. Though President Trump has not signed this bill into law and debate continues regarding the stimulus amount, we do not expect changes to Section 286.

CGWG will continue to monitor the effects of the Consolidated Appropriations Act on employers. If you have any questions about COVID-19-related leave or how the Consolidated Appropriations Act impacts your business or organization, please contact an attorney at our Firm.