Changes to Employee Sick Leave & Family Leave

Tax Updates to Employee Sick Leave and

Family Sick Leave

The IRS has extended the paid sick and family leave credits, for periods of leave taken through March 31, 2021. Qualified businesses include those with less than 500 employees and who pay “qualified sick leave wages” to get a credit for wages or compensation paid to an employee who is unable to work (including telework) because of coronavirus quarantine, self-quarantine or has coronavirus symptoms and is seeking a medical diagnosis.

Eligible employers may claim credit for paid sick leave provided to an employee for up to two weeks (up to 80 hours) at the employee's regular rate of pay up to $511 per day and $5,110 in total.

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Family Leave Credit - Tax Updates

The Family and Medical Leave Act (FMLA) generally entitles eligible employees of covered employers to unpaid, job-protected leave for specified family and medical reasons.

The family leave credits, which previously were available only until the end of 2020, have been extended for periods of leave taken through March 31, 2021.

Qualified family leave wages are wages provided when an employee is unable to work or telework due to:

Caring for someone with coronavirus or
Caring for a child because the child's school or place of care is closed, or
The paid childcare provider is unavailable due to the coronavirus.

The IRS states that employers are entitled to a paid family leave credit for paid family leave provided to an employee equal to 2/3 of the employee's regular pay, up to $200 per day and $10,000 in total. Up to 10 weeks of qualifying leave can be counted towards the family leave credit.