Tax Credits for Employers Who Voluntarily Provide E-PSL and E-FMLA Extended

The recently passed American Rescue Plan Act extends tax credits originally enacted under the Families First Coronavirus Response Act (FFCRA) until September 30, 2021. 

Under the FFCRA, employers that provided voluntary Emergency Paid Sick Leave (E-PSL) and Emergency Family and Medical Leave (E-FMLA) received dollar-for-dollar tax credits. The Act provides an additional tax credit for pension plan contributions and apprenticeship fund contributions under certain collective bargaining agreements.

The American Rescue Plan Act “resets” the amount of leave available to employees whose employers offer E-PSL and E-FMLA, to a full 80 hours of paid sick leave and 12 weeks of emergency family leave beginning April 1, 2021, even if the employee has previously taken leave under FFCRA or the 2021 Consolidated Appropriations Act (CAA). The Act also adds vaccine appointments and complications from receiving the vaccine as reasons employees may qualify for leave.

Further, the Act includes additional tax credits for certain “amounts paid under certain collectively bargained agreements,” including: (1) pension plan contributions and (2) apprenticeship fund contributions that are allocable to E-PSL and E-FMLA. The Act is careful to limit the tax credit, though, to those amounts “required to be made pursuant to the terms of a [CBA].” If the CBA or the Plan does not require a pension fund or apprenticeship fund contribution for E-PSL or E-FMLA, then the tax credit would not be available. The Act doesn’t specifically allow tax credits for other fringe benefit payments typically paid by contractors.

For additional guidance, view the SMACNA Contractors Guide recorded webinar.

If you have questions about the FFCRA extension, contact Maggie Powers, Assistant Director of Labor Relations, at mpowers@smacna.org.