The IRS has released updated FAQs on the American Rescue Plan Act tax credit for temporary permissible paid sick leave and paid family leave. As a reminder, the Families First Coronavirus Response Act (FFCRA) enacted on March 18, 2020 and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted on March 27, 2020 provided for mandated emergency paid sick leave and family and medical leave.

While the mandate initially expired December 31, 2020, the Consolidated Appropriations Act (CAA) of 2021 allowed employers to voluntarily continue to make the leave available and claim a tax credit through March 31, 2021. The American Rescue Plan Act further extended the tax credit to employers who choose to continue to make this leave available through September 30, 2021.

Employees can use leave to accompany family members

The updated FAQs clarify that employees can use the paid sick leave or paid family leave to accompany a household member to get the COVID-19 vaccine, or to care for a household member after the vaccination.

The complete list of permissible reasons for leave include if the employee is unable to work because the employee:

• is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
• has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
• is (1) experiencing symptoms of COVID-19 and seeking a medical diagnosis, (2) seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 and the employee has been exposed to COVID-19 or the employee's employer has requested the test or diagnosis, or (3) obtaining immunization related to COVID–19 or recovering from any injury, disability, illness, or condition related to the immunization;
• is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
• is caring for a child of the employee if the school or place of care of the child has been closed (including the closure of a summer camp, summer enrichment program, or other summer program), or the child care provider of the child is unavailable due to COVID-19 precautions;
• is experiencing any other substantially similar condition specified by the Secretary of HHS in consultation with the Secretary of the Treasury and the Secretary of Labor. The Secretary of HHS has specified, after consultation with the Secretaries of Treasury and Labor, that a substantially similar condition is one in which the employee takes leave (1) to accompany an individual to obtain immunization related to COVID-19, or (2) to care for an individual who is recovering from any injury, disability, illness, or condition related to the immunization.

Although the reasons for Eligible Employers to pay employees the qualified family leave wages are the same as for the qualified sick leave wages, the wages cannot be for the same hours for purposes of claiming the credits.

How much emergency sick leave is available?

Full-time employees may have up to 80 hours of leave for qualifying reasons. Part-time employees (those regularly scheduled to work fewer than 40 hours per week) may have a pro-rata amount of leave based on average hours worked in a two-week period.

The American Rescue Plan Act makes an additional 10 days of emergency paid sick leave available, beginning April 1, 2021. Employers may, but are not obligated to, make this leave available.

How much emergency family leave is available?

Up to 12 weeks of leave is available. As per the American Rescue Plan, effective April 1, 2021, all twelve (12) weeks of emergency family leave can be paid. Previously, the first 10 days of the leave could be unpaid, though, an individual could, at his/her discretion, choose to use available paid time off such as vacation, personal leave or other available PTO. 

Leave is paid at not less than two-thirds of the individual’s regular monthly rate of pay, not to exceed $200 per day and $12,000 in the aggregate.  Emergency FMLA leave for a part-time employee would be pro-rated based on their hours worked.

Additional Resources

For additional information see our FAQ on this topic. 

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.