September 25, 2021

Volume XI, Number 268

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September 22, 2021

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American Rescue Plan Tax Credits for Employers Who Voluntarily Provide FFCRA Leave – Supplement

This is a Supplement to our post on March 24, 2021 regarding Section 9641 of the American Rescue Plan Act of 2021 (the “ARPA”). This Supplement addresses state and local governmental employers.

Section 9641 of the Rescue Plan makes available tax credits to offset the costs borne by certain employers who voluntarily provide emergency paid sick leave and emergency paid family leave to employees for certain types of covered absences occasioned by the pandemic, from April 1, 2021 through September 30, 2021.

Prior to April 1, 2021, no tax credits were provided for state and local government employers who were either required to provide leave under the Families First Coronavirus Response Act (FFCRA) during 2020, or did so voluntarily from January 1, 2021 through March 31, 2021.

However, Section 9641 of the ARPA does appear to extend the availability of tax credits to state and local governmental employers who voluntarily provide FFCRA leave from April 1, 2021 through September 30, 2021.

It appears that a state or local governmental employer must meet all of the relevant provisions of the FFCRA, as amended by the ARPA, in order to qualify for the credits, including the “nondiscrimination” rules contained in Internal Revenue Code Sections 3131(j) and 3132(j). Please see our March 24, 2021 post for additional details.

As of this date, the IRS has not updated Questions and Answers on its web site pertaining to FFCRA credits to reflect the passage of the ARPA. Thus, we have not seen an official acknowledgement of the foregoing. Thus, state and local governmental employers should stay tuned for further guidance from the IRS.

© Copyright 2021 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 85
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About this Author

Gregory J. Viviani, Squire Patton Boggs, Employee Benefits Lawyer,
Partner

Gregory Viviani focuses his practice on employee benefits. He has experience in all aspects of employee benefits law and related income tax matters including ERISA requirements, tax-qualified retirement plans, nonqualified deferred compensation plans, fringe benefits and employment taxes. He has particular experience in matters relating to governmental bodies and tax-exempt organizations.

216 479 8622
Laura Lawless Trial Attorney Squire Patton Boggs Phoenix, AZ
Partner

Laura Lawless is a trial lawyer who represents employers before federal and state courts and administrative agencies, as well as in arbitration and mediation proceedings, defending employers in matters arising under federal and state employment laws, including claims of discrimination, harassment, retaliation, whistleblower retaliation, wrongful termination, wage and hour violations, and breach of contract, as well as in in noncompetition, nonsolicitation, nondisclosure, trade secret and unfair competition cases.

Laura also counsels and collaborates with human resources...

602-528-4137
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