Last night, President Trump signed the new COVID-19 relief bill into law. Significantly, the bill includes a major expansion of the Paycheck Protection Program (PPP), allowing eligible small business to obtain a second loan under the program. Please refer to our last email (December 22) for more information on the changes to the PPP.
Other items in the new bill affecting employers are as follows:
- Taxpayers may rollover unused amounts in their health and dependent care flexible spending arrangements from 2020 to 2021, and from 2021 to 2022.
- The Work Opportunity Tax Credit (WOTC), originally set to expire on December 31, 2020, has been extended to December 31, 2025.
- Employer tax credit for paid family and medical leave has been extended through December 31, 2025, and applies to wages paid in taxable years beginning with 2021.
- Employer tax credit for paid sick and family leave under the Families First Coronavirus Response Act (FFCRA) has been extended through March, 2021 for employers that continue to voluntarily offer paid sick and family leave to their employees.
- Expanded unemployment insurance benefits have been extended through March 14, 2021
- The Employee Retention Tax Credit has been expanded to include borrowers of a PPP loan, retroactive to March 12, 2020. The expiration of the credit has been extended from December 31, 2020 to June 30, 2021. The new bill also changes the way the credit is calculated.
- The repayment period for deferred payroll taxes has been extended through December 31, 2021, and penalties and interest on deferred liability will not begin to accrue until January 1, 2022.
It is also important to note something that was left out of the bill: an extension of FFCRA. FFCRA, which had been in effect since March, expires on December 31, 2020. FFCRA created new categories of protected, paid sick leave for employees sick with COVID and for other reasons related to COVID. These categories of leave will no longer exist in the new year.
There was a chance that FFCRA would be extended as part of the new bill, but congress ultimately elected not to do so. With FFCRA leave no longer available, employers should be aware of other types of leave employees may be eligible for, including unpaid leave under the Family and Medical Leave Act (FMLA). Employers may also have obligations to provide accommodations under the Americans with Disabilities Act (ADA), particularly for employees experiencing persistent, long-term COVID symptoms.