Small to Medium-sized Business FAQs about American Rescue Plan Act of 2021

To help small to medium-sized businesses better understand the tax credits available under

the ARP Act of 2021, the IRS has created a list of Frequently Asked Questions (FAQs).

These FAQs also apply to certain governmental employers without regard to the number of employees for qualified sick and family leave wages paid with respect to leave taken by employees, April 1 - September 30, 2021, as well as the equivalent credits available for certain self-employed individuals.

Frequently Asked Questions

The IRS has compiled this list of FAQs - Click on each question below to view to view the IRS information.

• Overview

• General Information

• What is an Eligible Employer?

• Determining the Amount of the Tax Credit for Qualified Sick Leave Wages

• Determining the Amount of the Tax Credit for Qualified Family Leave Wages

• Determining the Amount of Allocable Qualified Health Plan Expenses

• Determining the Amount of Allocable Collectively Bargained Contributions

• How to Claim the Credits

• How Should an Eligible Employer Substantiate Eligibility for Tax Credits for Qualified Leave Wages?

• Periods of Time for Which Credits are Available

• Special Issues for Employers: Taxation and Deductibility of Tax Credits

• Special Issues for Employers: Interaction of the American Rescue Plan Act of 2021 Tax Credits with Other Tax Credits

• Special Issues for Employers: Use of Third-Party Payers

• Special Issues for Employers: Other Issues

• Special Issues for Employees

• Specific Provisions Related to Self-Employed Individuals

Although the requirement that Eligible Employers provide leave under the Emergency Paid Sick Leave Act (EPSLA) and Emergency Family and Medical Leave Expansion Act (Expanded FMLA) under the Family First Coronavirus Response Act (FFCRA) does not apply after December 31, 2020, the tax credits under sections 3131 through 3133 of the Internal Revenue Code are available for qualified leave wages an Eligible Employer provides with respect to leave taken by employees between April 1 - September 30, 2021, if the leave would have satisfied the requirements of the EPSLA and Expanded FMLA, as amended for purposes of the ARP.

Claiming Tax Credits Prior to April 1, 2021

For information about the tax credits that may be claimed for qualified leave wages paid with respect to leave taken by employees prior to April 1, 2021, under the Families First Coronavirus Response Act ("FFCRA") and the COVID-related Tax Relief Act (the "Relief Act"), see Tax Credits for Paid Leave Under the Families First Coronavirus Response Act for Leave Prior to April 1, 2021 FAQs.