For eligible employers with less than 500 employees, the American Rescue Plan Act of 2021 (ARPA), entitles eligible small and midsize employers, as well as certain governmental employers, to claim employer tax credits for wages paid to employees for sick and family leave taken between April 1, 2021, through September 30, 2021, provided the leave is related to COVID-19.
In addition to paid sick or family leave taken for reasons related to COVID-19, time off includes leave taken to receive a COVID-19 vaccination. Leave associated with the recovery from any injury, disability, illness or condition related to the vaccination is also included.
Calculating the Tax Credits
The credits, which are refundable against the employer’s share of the Medicare tax, are reported on Form 941 (Employer’s Quarterly Federal Tax Return) or can be claimed in advance by filing Form 7200 (Advance Payment of Employer Credits Due to COVID-19).
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DISCLAIMER: The WM Daily Update COVID-19, COVID-19 Business Resources and COVID-19 Client News Alerts and other related communications are intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.