Tax Update - Paid Sick Leave Credit & Family Leave Credit

IRS updates FAQs on paid sick leave credit and family leave credit

The IRS has extended the paid sick and family leave credits, for periods of leave taken through March 31, 2021.

Qualified businesses include those with less than 500 employees and who pay “qualified sick leave wages” to get a credit for wages or compensation paid to an employee who is unable to work (including telework) because of coronavirus quarantine, self-quarantine or has coronavirus symptoms and is seeking a medical diagnosis.

Eligible employers may claim credit for paid sick leave provided to an employee for up to two weeks (up to 80 hours) at the employee's regular rate of pay up to $511 per day and $5,110 in total.

In addition, an eligible employer can also receive the paid sick leave credit for employees who are unable to work due to:

• Caring for someone with coronavirus or

• Caring for a child because the child's school or place of care is closed, or

• The paid childcare provider is unavailable due to the coronavirus.

Eligible employers may claim the credit for paid sick leave provided to an employee for up to two weeks (up to 80 hours) at 2/3 the employee's regular rate of pay, or up to $200 per day and $2,000 in total.

To read more about the additional updates, including PAID FAMILY LEAVE CREDIT, CLICK HERE .

The FAQs are available at COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs.