Under the latest pandemic relief program that was agreed upon by Republicans and Democrats at the final hour in late December, the focus for many was on the $600 stimulus checks that individuals would soon be seeing and the $300 per week from the federal government in unemployment benefits that many would be eligible for. But what changed for employers who were waiting for information relating to sunsetting programs (that were set to expire at the end of 2020)? What do employers need to know?
- Extension of Paid Sick and Family Leave Credits – The provision extends the refundable payroll tax credits for paid sick and family leave, enacted in the Families First Coronavirus Response Act, through March 31, 2021.
- Please note that this extends the credits, however the employer is no longer mandated – it is elective for the employer.
- Also note that the clock for sick leave or extended family leave does not restart.
- Employee Retention Credit Expansion – Several modifications were made to the ERC including:
- 2020 Changes
- ERC now available to businesses who received a PPP loan
- ERC is calculated on available payroll wages after accounting for the wages needed for the PPP loan forgiveness as long as a business is eligible
- 2021 Changes
- Extension of the credit through June 30, 2021
- Decreases the reduction in gross receipts from a 50% reduction to a 20% reduction
- Increases the percentage of wages that can be taken as a credit from 50% to 70%
- Increases the limit on per employee wages from $10,000/year to $10,000/quarter
- 2020 Changes
- Extension of Deferred Payroll Taxes
- Extension of the repayment period of the deferred employee taxes through December 31, 2021 instead of April 30, 2021
- Penalties and interest start January 1, 2022 instead of May 1, 2021
In this bill, there is also an extension for unemployment related items as well as additional funds for another round of PPP loans (PPP2) based on specific requirements. We drafted a summary of this bill here. You can read the entire bill here. Contact our experts today to learn how you’ll be impacted.
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