American Rescue Plan Act FFCRA Amendments

The American Rescue Plan Act (ARPA) modified the taxation of qualified sick/family leave credits under the Families First Coronavirus Response Act  (FFCRA).
ARPA also modified the calculation of the credit for the purposes of retaining federal 941 tax payments.
  • The previous calculation is equal to the sick leave wages paid for COVID-19 related reasons for up to two weeks (80 hours), limited to $511 per day and $5,110 in the aggregate, at 100% of the employee's regular rate of pay. The tax credit for paid family leave wages is equal to the family leave wages paid for up to twelve weeks, limited to $200 per day and $12,000 in the aggregate, at 2/3rds of the employee's regular rate of pay. The amount of these tax credits is increased by allocable health plan expenses and contributions for certain collectively bargained benefits, as well as the employer's share of Medicare taxes paid on the wages (up to the respective daily and total caps).
  • Per the IRS, the new calculation (post 4/1) is equal to the sick leave wages paid for COVID-19 related reasons for up to two weeks (80 hours), limited to $511 per day and $5,110 in the aggregate, at 100% of the employee's regular rate of pay. The tax credit for paid family leave wages is equal to the family leave wages paid for up to twelve weeks, limited to $200 per day and $12,000 in the aggregate, at 2/3rds of the employee's regular rate of pay. The amount of these tax credits is increased by allocable health plan expenses and contributions for certain collectively bargained benefits, as well as the employer's share of social security and Medicare taxes paid on the wages (up to the respective daily and total caps).

Was this answer helpful?  

Still need our help? Our support team is waiting to help you. Contact us