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TAX PRACTICE & PROCEDURES

Summary of key elements of the COVID-19 employment tax credits

Consolidated IRS guidance
Basics after CARES Act, Appropriations (in addition to
four public FFCRA, P.L. 116-127 P.L. 116-136 Act, 2021, P.L. ARPA, P.L. 117-2 public laws and
laws
116-260 nonbinding FAQs)

Paid sick For paid leave Minor 12/31/20 Extended for 4/1/21 Notice 2020-21
leave and taken starting technical expiration through 9/30/21 but paid Notice 2020-22
paid family 4/1/20, through corrections. date leave is not mandatory. Notice 2020-54
leave 12/31/20. extended Employee eligibility period Notice 2021-24
(also Paid leave is to 3/31/21, starts anew at 4/1/21 (new Notice 2021-53
available mandatory for but paid Code Sec. 3131(c)(1) and T.D. 9953
for self- small business leave is not Sec. 3132(c)(1)). Eligibility REG-109077-21
employed and tax-exempt mandatory reasons expanded.
individuals employers for these Family leave time frame is
applicable (under 500 2021 dates. 12 weeks rather than 10.
against self- employees); Credit includes employer
employment limited share of OASDI and
(Sec. 1402) exception Hospital Insurance (HI) (new
taxes). if under 50 Sec. 3133) (employer pays
employees these, while before, no
(see DOL FAQ employer OASDI was owed
59, available on leave and employer
at tinyurl. HI increased the credit
com/8n768a56). amount). Credit applies
against employer HI tax
rather than OASDI but is
still refundable.

Employee — For qualified Extended and Extended for 7/1/21 to Notice 2021-20
retention wages paid increased 9/30/21 or 12/31/21 for Notice 2021-23
credit after 3/12/20 for 1/1/21 to recovery startup businesses Notice 2021-24
(ERC) and before 6/30/21. (as amended by the Notice 2021-49
1/1/21. Retroactively Infrastructure Investment Rev. Proc.
allows and Jobs Act, P.L. 117-58). 2021-33
Paycheck Some expansion of T.D. 9953
Protection employer eligibility. REG-109077-21
Program Covered at new Sec. 3134
borrower to for 7/1/21 through 9/30/21 (in
also claim the case a recovery startup
ERC for 2020 business, through 12/31/21).
but not on the
same wages.

38 January 2022 The Tax Adviser