TaxBandits Knowledge Base

How to determine the amount of leave wages for which an eligible employer may receive credit?

Eligible employers can receive a credit equal to 100% of:

• Qualified leave wages paid to employees.
• Qualified health plan expenses related to maintaining a group health plan for those wages.
• The employer’s share of Medicare tax on the qualified leave wages.

Note: Employers can no longer claim COVID-19-related tax credits for these wages starting on or after the 2024 tax year.

Qualified Sick Leave Wages Payment Rates

• For employee health needs: If an employee cannot work due to their own health issues related to COVID-19, they are entitled to their regular pay (or the higher of the federal, state, or local minimum wage) up to $511 per day and $5,110 in total.
• For caregiving: If an employee needs to care for others due to COVID-19, they are entitled to two-thirds of their regular pay (or the higher minimum wage) up to $200 per day and $2,000 in total.

Qualified Family Leave Wages
Eligible employers must pay at least two-thirds of the employee’s regular pay for family leave, not exceeding $200 per day and $2,000 in total for the calendar year, based on the hours the employee was scheduled to work.

To determine the credit for qualified sick and family leave wages, you can use Worksheet 1 for leave taken between March 31, 2020, and April 1, 2021, and Worksheet 2 for leave taken after March 31, 2021, and before October 1, 2021.