Workforce Updates Through the Consolidated Appropriations Act for 2021

With the start of the new year and passing of the Consolidated Appropriations Act, 2021 (Act), there have been some important changes to rules providing relief due to COVID-19. On December 31, 2020 the Families First Coronavirus Response Act (FFCRA) expired. The Act provides an extension for employers to voluntarily provide the benefits under the FFCRA until March 31, 2021 and be able to receive a tax credit for those voluntarily provided benefits. There is one state exception to this for New York, the NY Emergency COVID-19 Paid Sick Leave (Quarantine Leave Law) remains in place and did not expire on 12/31/20.  

Pursuant to IRS Notice 2020-65, which provided guidance on the employment tax deferral that was the subject of a Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster, the due date for the withholding and payment of the employee share of Social Security taxes on certain wages was postponed until the period beginning on January 1, 2021 and ending on April 30, 2021. The Act extends the deadline for employees to repay these deferred taxes until December 31, 2021. 

The Act temporarily allows a 100 percent deduction for business expenses for food or beverages provided by a restaurant that are paid or incurred between January 1, 2021 and December 31, 2022. 

The CARES Act amended Section 127 of the Internal Revenue Code (which permits employers to provide certain educational assistance to employees on a tax-free basis) to allow the payment by an employer of principal or interest on certain employee qualified education loans through December 31, 2020. The Act expands this provision to permit the tax-free payment of principal or interest on qualified education loans by employers through December 30, 2025 (subject to applicable limits under Section 127). Per a Jackson Lewis article, employers may want to consider amending their Section 127 plans to provide this valuable tax-free benefit.