The Consolidated Appropriations Act, 2021, which became law on December 27, 2020, made changes to the employee retention tax credits available under the Coronavirus Aid, Relief and Economic Security Act (the CARES Act). Most notably:
- Extended federal unemployment benefits that expired on December 26, 2020. The Act restored the federal increase for all unemployment benefits, which adds $300 per week in benefits. It also provides for additional assistance of up to $275 per week for individuals who have exhausted state unemployment benefits or are self-employed. The federal assistance will be provided through March 13, 2021.
- Did not extend the paid COVID-related paid leave provisions of the CARES Act that expired on December 31, 2020. However, while leave is no longer required, the bill provides that employers can voluntarily provide employees with paid sick leave or paid FMLA leave through March 31, 2021 and then take a payroll tax credit.
- Although FFCRA leave is no longer required, the Relief Bill allows employers another calendar quarter of paid leave tax credits. Section 286 of the Relief Bill (“Extension of Credits for Paid Sick and Family Leave”) amends certain provisions of the FFCRA to allow employers to take a payroll tax credit for providing emergency paid “sick leave” and paid expended “family and medical leave” into the first quarter of 2021 for two purposes: (1) to recover costs of providing required FFCRA leave in 2020, and (2) to voluntarily provide paid emergency “sick leave” and emergency “family and medical leave” through March 31, 2021.