March 6, 2021
Dear Clients and Friends,
We hope that you are doing well during this time. We have enjoyed conversations with all of you as we move along during tax season and look forward to seeing you soon.
Over the course of the pandemic, many employment credits have been passed in various COVID-19 relief acts. We have spent a lot of time attending seminars and becoming educated on how these various credits will affect our clients.
One of these credits is for paid leave provided by small and midsize businesses for COVID-19 related time off. The Families First Coronavirus Response Act (FFCRA), later amended by the COVID-related Tax Relief Act of 2020, provides small and midsize employers refundable tax credits that reimburse them, dollar for dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.
These wages cannot have been paid with funds from a PPP loan and cannot also be used for the Employee Retention Credit. The Paid Sick Leave and Paid Expanded Family and Medical Leave Credits are available for reimbursement of wages paid from April 30, 2020 through March 31, 2021.
In general, employees of private sector employers with fewer than 500 employees, and certain public sector employers, are eligible for up to two weeks (80 hours) of fully or partially paid sick leave for COVID-19 related reasons, such as: being subject to a Federal, State, or local quarantine or isolation order related to COVID-19; being advised by a health care provider to self-quarantine related to COVID-19; experiencing COVID-19 symptoms and seeking a medical diagnosis; carrying for an individual subject to a Federal, State, or local quarantine or isolation order related to COVID-19; caring for a child whose school or child care is closed due to COVID-19 related reasons; or is experiencing any other substantially-similar condition as specified by the U.S. Department of Health and Human Services.
If you have paid wages to an employee of which you think may be eligible for the Paid Sick Leave and Paid Expanded Family and Medical Leave Credits, please contact our office to discuss the next steps.
As always, we appreciate your continued patronage and we are working diligently throughout the pandemic to assist our clients with their tax and financial needs.
Starkey & Company, PA