COVID Relief Bill: Tax Credits for Paid Leave Extended to March 31

President Trump COVID Relief Bill

President Trump has signed a new $900 billion COVID-19 Relief Bill. Among other things, the new bill answers the burning question of whether federal Emergency Paid Sick Leave (EPSL) and Emergency Family and Medical Leave (EFMLA) will be extended.

The answer is yes, but as an option, not a requirement. Here’s what employers need to know.

COVID Relief Bill Summary

  • After December 31, employers will have the option to continue offering EPSL and EFMLA.
  • An employee will no longer be entitled by law to take EPSL or EFMLA, even if they have a qualifying reason.
  • Employers who choose to offer these paid leaves can still receive a tax credit. To receive the credit, they must follow the current EPSL and EFMLA rules, including job protection.
  • The extension of the tax credit will apply to leaves taken through March 31, 2021.
  • Employees will not get new hours to use. Rather, the unused portion of their original allotment that remains on January 1 is how much they will be able to use through March 31. For example, say an employee was entitled to 80 hours of EPSL between April 1 and December 31. If they used 40 of those hours in 2020, they’d have 40 hours left to use between January 1 and March 31, 2021.
  • There is a possible exception when an employee’s EFMLA bank could reset if employers use the calendar year or another fixed FMLA tracking period that starts before March 31 and the DOL fails to readopt the regulations they wrote related to EFMLA. We expect the IRS, DOL, or both to provide guidance soon that will clear up whether certain employers will need to offer additional hours. Stay tuned for more updates on this when additional information becomes available.

Additional Aid

The new law also extends or revives several other benefits from previous coronavirus-related legislation. A few of the notable provisions include:

  • Individual payments of $600 for people with incomes at or below $75,000 and $600 per dependent children, with payments phased out for higher incomes.
  • A $300 weekly supplemental unemployment benefit, through March 14, 2021.
  • Extension of Pandemic Unemployment Assistance (for gig workers and the self-employed) through March 14, 2021.
  • Extension of Pandemic Emergency Unemployment Compensation (for those who run out of state unemployment insurance benefits) through March 14, 2021.
  • Reopening and refunding of the Paycheck Protection Program (see your financial or tax advisor for additional information).

Note on FFCRA Sick Pay Entry & Limits

Please note that SDP will be monitoring these limits on a period/aggregate basis only. Because SDP will not have your pay data by day, we are unable to monitor the daily limits specified under the COVID Relief Act.

As a result, please be vigilant to only enter allowable, eligible pay using these codes. Any additional pay for sick leave that you are providing to an employee, in excess of the limits defined, should be entered in an alternative code. Review Daily Limits

Let’s Talk

We have many resources related to EPSL and EFMLA available on the HR Support Center. Stay tuned for more information on COVID-19 response and upcoming legislation in 2021.

Need a little extra support? No matter your situation, SDP has layers of HR support that can help. Learn more about our HR Support Services here. And don’t forget to follow us on FacebookTwitter, and LinkedIn for even more business tips & news!

Photo Credit: Gage Skidmore Donald Trump via photopin (license)

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