Have You Taken Advantage of Employer Tax Credits for Paid COVID-19 Leave?

Various federal relief programs passed since the onset of the pandemic provide employer tax credits (or deferrals) attributable to wages paid to employees for paid sick and family leave due to COVID-19.

Many businesses can claim tax credits based on the wages of employees who: (1) take time off because of coronavirus quarantine; (2) are caring from someone with coronavirus; or (3) are unable to work because a child’s school or place of care is closed. These credits were expanded this summer.

In July, the Internal Revenue Service updated its guidance related to sick and family leave tax credits under the American Rescue Plan Act of 2021 (ARP).

Now, the application of such tax credits has been expanded to allow small and midsize employers to claim tax credits to reimburse the costs of leave being taken by employees to receive or recover from COVID-19 vaccinations. This includes employees taking time off to help family or household members, or others who look to the employee for caregiving help, to get vaccinated for COVID-19.

The ARP tax credits are available to eligible employers that paid such leaves from April 1, 2021, through Sept. 30, 2021 — meaning there is still time for employers to take advantage.

Also, still on the radar is the Employee Retention Tax Credit (ERTC) that could see employers of all sizes receive hundreds of thousands of dollars in tax credits.

If you think your company is eligible for paid sick and family leave tax credits or the ETRC, reach out to PBO Advisory at 858-622-1681 to schedule a complimentary review.

Anita Raygoza

Consulting Directo, HR Services
858-622-1681 Ext. 283