Biden's Stimulus Package Extends Voluntary FFCRA Tax Credits
Contact Clara (C.B.) Burns, Charles C. High, Jr., Michael D. McQueen and Gilbert L. Sanchez -
March 10, 2021
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Today, President Biden’s COVID-19 stimulus package was passed by Congress and will become law once President Biden signs it into effect this Friday. The package arrives after several weeks of tense negotiations from leaders of both parties. The package provides $1.9 trillion in economic relief, with many of the specific items directly effecting employers.
The stimulus package extends the Families First Coronavirus Response Act (“FFCRA”) tax credits available to employers who voluntarily provide FFCRA leave from March 31, 2021 to September 30, 2021. The package does not extend an employer’s obligation to provide paid leave to employees under the FFCRA. It does, however, provide that the tax credits are available for paid sick leave and paid family leave, if voluntarily provided for the additional qualifying reasons:
The stimulus package extends the Families First Coronavirus Response Act (“FFCRA”) tax credits available to employers who voluntarily provide FFCRA leave from March 31, 2021 to September 30, 2021. The package does not extend an employer’s obligation to provide paid leave to employees under the FFCRA. It does, however, provide that the tax credits are available for paid sick leave and paid family leave, if voluntarily provided for the additional qualifying reasons:
- The employee is obtaining immunization (vaccination) related to COVID-19;
- The employee is recovering from any injury, disability, illness or condition related to such vaccination; or
- The employee is seeking or awaiting the results of a diagnostic test or medical diagnosis for COVID-19 (or the employer has requested such a test or diagnosis).
Notably, the stimulus packages re-sets the 10-day limit for the tax credit for paid sick leave under the FFCRA beginning April 1, 2021. Therefore, a covered employer can voluntarily provide an additional 10 days of FFCRA paid sick leave beginning April 1, 2021, and would be eligible for a tax credit for doing so. Employers are not required to do so, however.
Additionally, the package adds non-discrimination rules that provide that no tax credit is available if the employer, in determining availability of the paid leave, discriminates against highly compensated employees, full-time employees, or employees on the basis of tenure with the employer. This provision ensures that employers that make the decision to voluntarily provide leave do so in a uniform manner, without discriminating against certain categories of workers.
If you have any questions about the expansion of the FFCRA tax credits or mandates under the new stimulus package, please feel free to contact Kemp Smith’s Labor and Employment Department at 915-533-4424.
Additionally, the package adds non-discrimination rules that provide that no tax credit is available if the employer, in determining availability of the paid leave, discriminates against highly compensated employees, full-time employees, or employees on the basis of tenure with the employer. This provision ensures that employers that make the decision to voluntarily provide leave do so in a uniform manner, without discriminating against certain categories of workers.
If you have any questions about the expansion of the FFCRA tax credits or mandates under the new stimulus package, please feel free to contact Kemp Smith’s Labor and Employment Department at 915-533-4424.
