- April 15, 2021
- Posted by: Andy Scheu
- Categories: COVID19 Resources, Human Resources
On March 11, the American Rescue Plan Act of 2021 was signed into law by President Biden. Much like the Families First Coronavirus Response Act of 2020, this act makes tax credits available to employers whose employees miss time due to COVID-19. Unlike the FFCRA, however, employers have the choice as to whether or not they participate. If they choose to do so, they are required to compensate employees for the same 5 reasons covered under the FFCRA:
- Employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
- Employee has been advised by a health care provider to quarantine for reason related to COVID-19.
- Employee is experiencing COVID-19 symptoms and seeking medical diagnosis.
- Employee is caring for an individual who is subject to quarantine due to government order or advise from a health care professional.
- Employee is caring for a dependent whose childcare provider is not available.
In addition, they are required to provide compensation for the following reasons:
- Employee is absent because they are awaiting a COVID-19 test result because they have been exposed, or the employer has requested that the employee be tested.
- Employee is obtaining a COVID-19 vaccination.
- Employee is recovering from an injury, disability, illness, or condition related to their COVID-19 vaccination.
In order to claim the tax credits available, participating employers will need to collect and maintain information from employees who are subject to sick, child care, or dependent leave due to one of these reasons. Click below to download our form that will help you do so!
Required Additional Sick Leave Information
If the employee is requesting leave because of an isolation or quarantine order, the employee must provide the name of the government entity that issued the order.
If the employee is requesting leave because they are self-quarantined due to experiencing symptoms, and is seeking a medical diagnosis, the employee must provide the name of the health care provider.
Required Additional Family Leave Information
An employee requesting leave for child care must provide:
- Name of the child being cared for
- Name of the school, place of care or child care that is closed or unavailable because of COVID-19
- A statement representing that no other suitable person is available to care for the child during the period of requested leave
- If the employee is requesting leave to care for a person quarantined because of order, or because of medical reasons, the employee must provide the name of the applicable government entity or health care provider.
In addition to this information, the employee must also provide documentation supporting the requested leave. In order to claim tax credits related to sick and family leave under the ARPA, employers must maintain this information, and the related documentation for 4 years, regardless of whether the request for leave was granted. Additional documentation that employers who claim the tax credits must maintain include:
- Form 941 for applicable quarters
- Form 7200, Advance of Employer Credits Due to COVID-19
- Any other applicable filings made to the IRS requesting the credit
- Documentation to show employer determined the amount of qualified sick and family leave wages paid to employees (payroll history)
- Documentation to show how the employer determined the amount of qualified health plan expenses allocated to wages