Sec. 7001. PAYROLL CREDIT FOR REQUIRED PAID SICK LEAVE
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## SEC. 7001 PAYROLL CREDIT FOR REQUIRED PAID SICK LEAVE **[**[26 U.S.C. 3111 note](/us/usc/t26/s3111)**]** ###
(a)In General In the case of an employer, there shall be allowed as a credit against the tax imposed by section 3111(a) or 3221(a) of the Internal Revenue Code of 1986 for each calendar quarter an amount equal to 100 percent of the qualified sick leave wages paid by such employer with respect to such calendar quarter. ###
(b)Limitations and Refundability ####
(1)Wages taken into account The amount of qualified sick leave wages taken into account under subsection
(a)with respect to any individual shall not exceed $200 ($511 in the case of any day any portion of which is paid sick time described in paragraph (1), (2), or
(3)of section 5102(a) of the Emergency Paid Sick Leave Act) for any day (or portion thereof) for which the individual is paid qualified sick leave wages. ####
(2)Overall limitation on number of days taken into account The aggregate number of days taken into account under paragraph
(1)for any calendar quarter shall not exceed the excess (if any) of— #####
(A)10, over #####
(B)the aggregate number of days so taken into account for all preceding calendar quarters. ####
(3)Credit limited to certain employment taxes The credit allowed by subsection
(a)with respect to any calendar quarter shall not exceed the tax imposed by section 3111(a) or 3221(a) of such Code for such calendar quarter (reduced by any credits allowed under subsections
(e)and
(f)of section 3111 of such Code, and section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, for such quarter) on the wages paid with respect to the employment of all employees of the employer. ####
(4)Refundability of excess credit #####
(A)######
(i)Credit is refundable If the amount of the credit under subsection
(a)exceeds the limitation of paragraph
(3)for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b) of such Code. ###### (ii)3 Advancing credit In anticipation of the credit, including the refundable portion under clause (i), the credit may be advanced, according to forms and instructions provided by the Secretary, up to an amount calculated under subsection (a), subject to the limits under subsection (b), both calculated through the end of the most recent payroll period in the quarter. 3Margin of clause
(ii)is so in law. See amendment made by section 3606(a)(1)(B) of division A of Public Law 116–136. #####
(B)Treatment of payments For purposes of section 1324 of title 31, United States Code, any amounts due to an employer under this paragraph shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. ###
(c)Qualified Sick Leave Wages For purposes of this section, the term “qualified sick leave wages” means wages (as defined in section 3121(a) of the Internal Revenue Code of 1986, determined without regard to paragraphs
(1)through
(22)of section 3121(b) of such Codeand section 7005(a) of this Act,)4 and compensation (as defined in section 3231(e) of the Internal Revenue Code, determined without regard to the sentence in paragraph
(1)thereof which begins “Such term does not include remuneration”and without regard to section 7005(a) of this Act) paid by an employer— 4A comma and close parenthesis is so in law. See amendments made by section 288(a) and
(b)of division N of Public Law 116–260. ####
(1)which are required to be paid by reason of the Emergency Paid Sick Leave Act, or ####
(2)both— #####
(A)which would be so required to be paid if such Act were applied— ######
(i)by substituting “March 31, 2021” for “December 31, 2020” in section 5109 thereof, and ######
(ii)without regard to section 5102(b)(3) thereof, and #####
(B)with respect to which all requirements of such Act (other than subsections
(a)and
(b)of section 5105 thereof, and determined by substituting “To be compliant with section 5102, an employer may not” for “It shall be unlawful for any employer to” in section 5104 thereof) which would apply if so required are satisfied. ###
(d)Allowance of Credit for Certain Health Plan Expenses ####
(1)In general The amount of the credit allowed under subsection
(a)shall be increased by so much of the employer’s qualified health plan expenses as are properly allocable to the qualified sick leave wages for which such credit is so allowed. ####
(2)Qualified health plan expenses For purposes of this subsection, the term “qualified health plan expenses” means amounts paid or incurred by the employer to provide and maintain a group health plan (as defined in section 5000(b)(1) of the Internal Revenue Code of 1986), but only to the extent that such amounts are excluded from the gross income of employees by reason of section 106(a) of such Code. ####
(3)Allocation rules For purposes of this section, qualified health plan expenses shall be allocated to qualified sick leave wages in such manner as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among covered employees and pro rata on the basis of periods of coverage (relative to the time periods of leave to which such wages relate). ###
(e)Special Rules ####
(1)Denial of double benefit For purposes of chapter 1 of such Code, the gross income of the employer, for the taxable year which includes the last day of any calendar quarter with respect to which a credit is allowed under this section, shall be increased by the amount of such credit. Any wages taken into account in determining the credit allowed under this section shall not be taken into account for purposes of determining the credit allowed under section 45S of such Code. ####
(2)Election not to have section apply This section shall not apply with respect to any employer for any calendar quarter if such employer elects (at such time and in such manner as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe) not to have this section apply. ####
(3)Certain terms Except as otherwise provided in this section, any term used in this section which is also used in chapter 21 of such Code shall have the same meaning as when used in such chapter. #### (4)5 Certain governmental employers This credit shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing. 5There are two paragraph (4)s’ in law. The second paragraph
(4)was added by section 288(c) of division N of Public Law 116–260. #### (4)5 References to railroad retirement tax Any reference in this section to the tax imposed by section 3221(a) of the Internal Revenue Code of 1986 shall be treated as a reference to so much of such tax as is attributable to the rate in effect under section 3111(a) of such Code. ###
(f)Regulations The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including— ####
(1)regulations or other guidance to prevent the avoidance of the purposes of the limitations under this section, ####
(2)regulations or other guidance to minimize compliance and record-keeping burdens under this section, ####
(3)regulations or other guidance providing for waiver of penalties for failure to deposit amounts in anticipation of the allowance of the credit allowed under this section, ####
(4)regulations or other guidance for recapturing the benefit of credits determined under this section in cases where there is a subsequent adjustment to the credit determined under subsection (a), ####
(5)regulations or other guidance to ensure that the wages taken into account under this section conform with the paid sick time required to be provided under the Emergency Paid Sick Leave Act, and ####
(6)regulations or other guidance to permit the advancement of the credit determined under subsection (a). ###
(g)Application of Section This section shall apply only to wages paid with respect to the period beginning on a date selected by the Secretary of the Treasury (or the Secretary’s delegate) which is during the 15-day period beginning on the date of the enactment of this Act, and ending on March 31, 2021. ###
(h)Transfers to Federal Old-Age and Survivors Insurance Trust Fund There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a)) amounts equal to the reduction in revenues to the Treasury by reason of this section (without regard to this subsection). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund or Account had this section not been enacted. ###
(i)Treatment of Deposits The Secretary of the Treasury (or the Secretary's delegate) shall waive any penalty under section 6656 of the Internal Revenue Code of 1986 for any failure to make a deposit of the tax imposed by section 3111(a) or 3221(a) of such Code if the Secretary determines that such failure was due to the anticipation of the credit allowed under this section.
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Sec. 7001
PAYROLL CREDIT FOR REQUIRED PAID SICK LEAVE
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