Paid Sick Leave and Child Care Leave Tax Credits

Paid Sick and Family Leave Tax Credits

Through the American Rescue Plan Act, eligible small and midsize employers may claim refundable tax credits if they provide paid sick and family leave for their employees due to COVID-19. Eligible employers are entitled to tax credits for wages paid for leave taken by employees who are not able to work or telework due to reasons related to COVID-19, including leave taken to receive COVID-19 vaccinations or to recover from any injury, disability, illness or condition related to the vaccinations. These tax credits are available for wages paid for leave from April 1, 2021, through September 30, 2021.

Eligibility

• Any business with less than 500 employees
• Governmental employers, excluding the federal government

Paid Sick Leave Credit

• Up to two weeks (80 hours)
• Limited to $511 per day and $5,110 in the aggregate
• 100 percent of the employee's regular rate of pay 

Paid Family Leave Credit

• Up to twelve weeks
• Limited to $200 per day and $12,000 in the aggregate
• 2/3 of the employee's regular rate of pay