As you are probably aware, the American Rescue Plan Act of 2021 (ARPA) went into effect on March 11, 2021. There are three key provisions that may affect local employers. They are:
- FFCRA Tax Credit extensions for E-PSL and E_FMLA
- Cobra Subsidy
- Extended Federal Unemployment Benefits
FFRCA Tax Credit Emergency Paid Sick Leave and Emergency Family and Medical Leave. extends the Consolidated Appropriations Act, 2021 until September od 2021.
Employers with less than 500 employees may elect to provide E-PSL and E_FMLA leave benefits to employees. In return for this PAID leave, employers of less than 500 employees may become available for tax credits (Please see your tax professional for additional details on this.)
There are a few criteria to being eligible for this tax credit. These are:
- Additional Qualifying Reasons for Leave. Under the ARPA, employees can now take paid sick and family leave for (1) vaccine appointments and (2) complications due to receiving the vaccine in addition to the qualifying reasons under the FFCRA.
- Additional Hours. After March 31, 2021, the 80-hour per employee limit will reset and employees will be entitled to a fresh set of 80 hours of leave.
- Increase on Credit Limit. The limit for the tax credit was increased to $12,000.
- Non-discrimination rule. The ARPA provides that the tax credit is only available to employers who provide leave uniformly, without discriminating against certain categories of workers.
The Cobra Subsidy provides a 100% subsidy for premium payments made by employees from April 1,2021 to September 30, 2021.
There are, of course, some requirements:
- Employers must provide notice of availability of the subsidy to employees who become eligible, some employees who have declined COBRA and those who ceased COBRA benefits.
- The above notice must be issued to the employee 15 to 45 days before the date when their COBRA benefits would expire,
The DOL should be providing model notice by April 10, 2021.
Federal Unemployment Benefits have been extended to September 6, 2021. This includes:
- Pandemic Unemployment Assistance (PUA) which extends unemployment benefits to 79 weeks.
- Federal Pandemic Unemployment Compensation (FPUC) which continues the federal unemployment subsidy of $300 per week through September 6, 2021.
- Pandemic Emergency Unemployment Compensation (PEUC) which provides 53 weeks of unemployment benefits to individuals who have exhausted state unemployment benefits.
Please feel free to contact me, your CPA or Tax Professional or your legal team for additional information.