BY KATIE HALL, REYNOLDS + ROWELLA

President Biden has signed the American Rescue Plan Act (ARPA) into law on March 11, 2021, which includes an extension of tax credits for employer-provided paid sick leave originally provided under the Families First Coronavirus Response Act (FFCRA).

Previously, the FFCRA provided Emergency Paid Sick Leave (EPSL) to employers with fewer than 500 employees. Employers had to pay sick leave of up to 80 hours to an employee who was:

1. subject to a federal, state, or local quarantine or isolation order related to COVID-19;
2. advised by a health care provider to self-quarantine due to concerns related to COVID-19;
3. experiencing symptoms of COVID-19 and seeking a medical diagnosis;
4. caring for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
5. caring for a child of such employee if the school or place of care of the child has been closed (including the closure of a summer camp, summer enrichment program, or other summer program), or the childcare provider of such child is unavailable due to COVID-19 precautions.

For reasons 1, 2, & 3 the employer pays qualified sick leave wages for up to two weeks (up to 80 hours) at 100% of the employee’s regular rate of pay to a max of $511 per day and $5,110 in the aggregate.

For reasons 4 & 5, the employer pays qualified sick leave wages for up to two weeks (up to 80 hours) at a rate of 2/3 of the employee’s regular rate of pay. The maximum amount of qualified sick leave wages paid due to these reasons $200 per day and $2,000 in the aggregate.

For all reasons listed above, employers could receive a dollar-for-dollar tax credit up to the maximums listed.

Beginning April 1, 2021, the ARPA extends employer’s ability to receive tax credits for voluntarily providing EPSL through September 30^th and expands the reasons for eligible leave. Now, in addition to the reasons listed above, employees are eligible to take leave for the following reasons at 100% of the employee’s regular rate of pay to a max of $511 per day and $5,110 in the aggregate:

• The worker is getting a COVID-19 vaccine;
• The employee is recovering from complications due to receiving the vaccine;
• The worker is awaiting the results of a COVID-19 test or diagnosis for coronavirus.

The ARPA also resets the 10-day limit for the tax credit for paid sick leave under FFCRA as of April 1^st. Accordingly, if employees had previously exhausted their entitlement to paid sick leave under the FFCRA, they now have another 10-day/80-hours for use.

Since it is optional for employers to provide this leave, employers have a few decisions to make:

• Option 1: Continue offering FFCRA paid sick leave for the reasons above and reset balances with a new bank of time. This will allow employers to claim the tax credit for eligible leave taken.
• Option 2: Continue offering FFCRA paid sick leave but retain your employees’ current balances and not reset leave balances on April 1. Employers will NOT be eligible for the tax credit with this option.
• Option 3: Discontinue offering FFCRA paid sick leave beginning April 1 and reset balances to zero.

While providing employees with a reset leave balance as of April 1^st is at no cost to the employer, employers still need to weigh the benefits of doing so. Employers should consider the severity of the outbreak in their area, what their demand for labor will be like through September 30^th, and how increased vaccination rates will affect their workforce.

Katie Hall, PHR, Director, HR

katieh@reynoldsrowella.com With over a decade of diversified knowledge in HR, Katie has extensive hands-on experience leading HR initiatives including policy design, compensation, performance management, recruiting, compliance reporting, HR workflow development, training and development, and benefits administration. She assists R+R clients with recruiting and retaining quality staff and working closely with businesses in regards to their benefits, training and compensation programs

About Reynolds + Rowella

Reynolds + Rowella is a regional accounting and consulting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

Our mission is to operate as a financial services firm of outstanding quality. Our efforts are directed at serving our clients in the most efficient and responsive manner possible, delivering services that exceed the expectations of those we serve. The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, please contact Elizabeth Bresnan at 203.438.0161 or email.

BY KATIE HALL, REYNOLDS + ROWELLA

The American Rescue Plan Act (ARPA), signed into law by President Biden on March 11, 2021, includes several provisions requiring immediate action by employers. Among the provisions includes a 100% federal subsidy of COBRA premiums during the period of April 1, 2021, through September 30, 2021.

COBRA Subsidy Overview:

For a limited period, the ARPA requires employers to cover 100% of the cost of continuing group health coverage under COBRA for up to six months for “assistance eligible individuals” or “AEIs”. An AEI is a current or former employee who has lost coverage under their employer’s health care plan due to a reduction in hours or involuntary termination (for reasons other than gross misconduct). This will effectively allow AEIs (and their spouses and dependent children) to continue employer-sponsored health insurance coverage without having to contribute towards the premium costs through September 2021. Individuals who voluntarily terminated their employment are not eligible, and all other COBRA Qualifying Events do not quality for ARPA’s COBRA subsidy.

What Employers Need to Know:

• Employers will need to identify their AEIs. AEIs are employees or former employees who lost health plan coverage within the past 18 months (on or after November 1, 2019), because of an involuntary termination of employment or reduction in hours.
• AEIs and family members who currently have COBRA coverage will be eligible for a 100 percent subsidy of their premiums for up to six months (through September 30, 2021). The employer, insurer or multiemployer plan sponsor will offset the cost by claiming a credit against Social Security and Medicare payroll taxes.
• AEIs and family members who lost coverage because of an involuntary termination or reduction in hours after November 1, 2019, but who either did not elect COBRA or let their COBRA lapse, will have until 60 days after receipt of the notice to elect COBRA beginning April 1^st. Any election for these participants would be prospective only, and not retroactive to the date coverage was lost. It is unclear whether these election deadlines will supersede the previous Department of Labor extension for COBRA elections.
• Employers will need to send the below notices to each of these AEIs (and their covered family members) within 60 days after April 1, 2021. The Department of Labor is supposed to issue model notices within 30 days of enactment.
  • General Election Notice- Employers must provide a General Election Notice to AEIs who first become eligible for subsidized coverage between April 1^st and September 30^th, 2021. This notice must provide AEIs with information regarding premium assistance.
  • Special Election Notice- Employer must provide a Special Election Notice to AEIs who previously elected and discontinued COBRA coverage or declined COBRA coverage between November 2019 to March 31, 2021.
  • Expiration of Subsidy Notice- Employers must provide this notice to AEIs to alert them that the subsidized aspect of their COBRA coverage will expire on a certain date. This notice must be provided between 15 to 45 days before the subsidy ends.
• The ARPA subsidy does not extend COBRA coverage—coverage will still expire 18 months after coverage was lost, even if that is in the middle of the subsidy period. Apart from ARPA, coverage can be extended for a second qualifying event (up to a total of 36 months). ARPA does not address whether the subsidy will apply during that period.
• Any AEI or family member who is or becomes eligible for other group health coverage or Medicare is not eligible for the subsidy. The individual has the obligation to notify the employer if he or she is not eligible or loses eligibility.
• Employers can allow AEIs to enroll in other health plan options offered by the employer (rather than the option the AEI was enrolled in prior to the loss of coverage) if that other option is less expensive.
• The subsidy is not taxable to the COBRA beneficiary.
• There is no income cap for the subsidy.

While this subsidy goes into effect in a matter of days, there are still many questions yet to be answered. As the DOL releases model notices, regulations, and other guidance, R+R will continue to update clients on the COBRA subsidy.

If you have questions about new COBRA subsidy requirements or how it will impact your business, contact R+R’s Director of HR Services, Katie Hall.

Katie Hall, PHR, Director, HR

katieh@reynoldsrowella.com With over a decade of diversified knowledge in HR, Katie has extensive hands-on experience leading HR initiatives including policy design, compensation, performance management, recruiting, compliance reporting, HR workflow development, training and development, and benefits administration. She assists R+R clients with recruiting and retaining quality staff and working closely with businesses in regards to their benefits, training and compensation programs

About Reynolds + Rowella

Reynolds + Rowella is a regional accounting and consulting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

Our mission is to operate as a financial services firm of outstanding quality. Our efforts are directed at serving our clients in the most efficient and responsive manner possible, delivering services that exceed the expectations of those we serve. The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, please contact Elizabeth Bresnan at 203.438.0161 or email.

Here are some of the key ARPA provisions that will affect federal income taxes for some people in 2020 and 2021.

Key Changes for Individuals

The new law includes the following tax and financial provisions for individuals and families:

• Additional EIPs. A third round of economic impact payments (EIPs) will provide $1,400 for eligible individuals ($2,800 for married couples) and $1,400 for each qualifying dependent. The income caps for receiving these payments has been significantly reduced from the caps that applied to prior EIP payments.
• Expanded and partially exempt unemployment benefits. Federal unemployment benefits of $300 per week have been extended through September 6, 2021. In addition, taxpayers who report less than $150,000 of adjusted gross income (AGI) may exclude up to $10,200 of unemployment benefits from gross income for tax years beginning in 2020. Married couples with AGI of less than $150,000 may exclude up to $20,400 of unemployment benefits if both spouses received these benefits in 2020.
• Expanded and increased Child Tax Credit (CTC). This credit has been expanded for 2021 to include qualifying children under age 18, and for eligible taxpayers, the amount has been increased from $2,000 to $3,000 per qualifying child ($3,600 for children under age 6 at year end).
• Enhanced child and dependent care credit. For 2021, this credit will be refundable, and the amount will increase for eligible taxpayers. For taxpayers with AGI of $125,000 or less, the maximum amount of the credit for 2021 is $4,000 for one qualifying child or dependent ($8,000 for two or more qualifying children and dependents). The credit is phased out at higher income levels.
• Exclusion for student loan forgiveness. Partial and full discharges of certain student loans given after December 31, 2020, but before January 1, 2026, may be exempt from federal income tax.

Key Changes for Businesses

The new law includes the following tax-related provisions for businesses and self-employed individuals:

• Expanded Employee Retention Tax Credit. This credit has been extended through the end of 2021 (before the law, it had been scheduled to end on June 30). It’s also been expanded to apply to recovery startup businesses that launched after February 15, 2020, and have average annual gross receipts under $1 million.
• Increased exclusion for employer-provided dependent care assistance. The exclusion for assistance provided under a qualified dependent care assistance program has been increased to $10,500 ($5,250 for married people who filed separate returns) for 2021.
• Exclusion for EIDL advances. Eligible small businesses that receive targeted Economic Injury Disaster Loan (EIDL) advances may exclude the amounts received from gross income for federal tax purposes.

• Exclusion for restaurant revitalization grants. Businesses that provide food or drinks, i.e. restaurants, food trucks and bars, may receive restaurant revitalization grants from the U.S. Small Business Administration. These grants are excluded from gross income for federal tax purposes.
• Extension of limitation on excess business losses. Noncorporate taxpayers are currently subject to a limit on excess business losses of $250,000 ($500,000 for a married joint-filing couple). These limits are adjusted annually for inflation. Losses that are disallowed under this rule are carried forward to later tax years, then they can be deducted under the rules that apply to net operating losses. Previously, the CARES Act temporarily suspended the excess business loss rule for losses arising in tax years beginning in 2018 through 2020. This limitation comes back into play for 2021 and was scheduled to expire at the end of 2025. The ARPA pushes back the expiration date by one year to the end of 2026.

The COVID-19 pandemic has affected every household and business in some way—this article only covers some of the provisions in the 628-page new law. If you or your business have suffered financial losses, contact a R+R tax advisor to discuss resources under the ARPA that may be available to help you with recovery.

About Reynolds + Rowella

Reynolds + Rowella is a regional accounting and consulting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

Our mission is to operate as a financial services firm of outstanding quality. Our efforts are directed at serving our clients in the most efficient and responsive manner possible, delivering services that exceed the expectations of those we serve. The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, please contact Elizabeth Bresnan at 203.438.0161 or email.

BY KATIE HALL, REYNOLDS + ROWELLA

The COVID-19 vaccine is providing many employers with the hope that things may soon return to normal—or as normal as can be considering a year-plus long pandemic. The vaccine certainly provides a glimmer of light at the end of the tunnel, but there are few things employers should consider while planning how to best protect their employees.

Let’s start with the most common questions:

Can we require all employees to get vaccinated?

The simple answer: Yes, but with exemptions. On December 16^th, 2020, The Equal Employment Opportunity Commission (EEOC) released guidance specific to COVID-19 vaccination programs. While they have not expressly stated that employers can require vaccinations, it can be inferred that it may be permissible with certain exemptions. Specifically, employers must be prepared to exempt those with disabilities, pregnancy-related medical conditions, and/or religious objections.

The EEOC’s guidance states that the Americans with Disabilities Act (ADA) allows employers to require that individuals “shall not pose a direct threat to the health or safety of individuals in the workplace. However[…] if a vaccination requirement screens out or tends to screen out an individual with a disability, the employer must show that an unvaccinated employee would pose a direct threat due to a ‘significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.’” If an employee refuses to obtain the vaccine due to disability, the employer should evaluate whether they pose a direct threat by evaluating

• the duration of the risk;
• the nature and severity of the potential harm;
• the likelihood that the potential harm will occur;
• and the imminence of the potential harm.

If it is concluded that an unvaccinated employee would pose a direct threat to the worksite, the employer must then consider whether a reasonable accommodation can be made, such as allowing the employee to work from home or providing another mutually agreed-upon work arrangement.

Title VII of the Civil Rights Act of 1964 (Title VII) also provides certain exemptions. Once an employer is made aware of an employee’s sincerely held religious beliefs, practice, or observance that prevents them from getting the vaccine, the employer must provide a reasonable accommodation unless it results in undue hardship (as determined under Title VII) to the employer.

Can we fire an employee that refuses to get vaccinated?

If an employee cannot get vaccinated due to a disability or sincerely held religious beliefs and no reasonable accommodation is possible, then an employer can “exclude” the employee from the workplace. This does not mean that the employee can be terminated, but that the employer will need to determine if any other rights apply under federal, state, or local authority before making that decision.

Employers may be faced with a difficult situation if employees refuse the vaccine outside of protected reasons, especially if a large number of employees refuse. Employers may have to choose between firing a potentially large number of employees or taking these refusals on a case by case basis, which may leave the employer open to discrimination claims.

So we can require the vaccine- but should we?

It depends. In certain environments, such as in healthcare, a vaccination requirement may make sense so long as employers comply with ADA and Title VII. But what about for those who are not considered frontline workers? For these employers, the answer becomes a bit grey. Employers should consider the climate surrounding the vaccine, as well as the fact that many Americans are hesitant to get it. A mandatory vaccination program may take a hit on employee morale in certain instances. Additionally, employers should also be aware of potential worker’s comp claims should the requirement result in an employee developing complications from the vaccine.  

What about providing incentives to employees to get the vaccine?

Currently, there is a lack of legal guidance from the EEOC surrounding incentives to get the vaccine. However, many large corporations are forging ahead with incentives despite this. Some of these incentives include one-time cash payments and paid time off to receive the vaccine. If an employer chooses to provide incentives, they should also consider how that may impact those that cannot get the vaccine due to disability or religious reasons. In order to avoid claims of discrimination, employers may want to provide other avenues to receive the incentive, such as taking a training on COVID safety precautions or periodic COVID testing.

As we await further guidance on this topic, providing education surrounding the vaccine in conjunction with a voluntary vaccine program may be employer’s safest bet.

As a Connecticut employer, what can I do now?

CT employers play a large part in getting CT residents vaccinated. The CT.gov website provides employers with information they need to help their workers gain access to the vaccine. According to the website, “Employers who have Phase 1b-eligible workforce should complete [the online VAMS enrollment form] in order to enroll in VAMS and enable their employees to schedule a vaccine appointment. Employers who do not have employees eligible in Phase 1b do not need to take any action at this time.”

Once an eligible employer has registered with VAMS, the employer can upload a roster of employees. Employees listed on the roster will receive an email from VAMS inviting them to schedule an appointment to receive the vaccine.

As with all things COVID-related, the rules are regularly in flux. Employers should check EEOC’s latest guidance prior to finalizing any vaccination programs or incentive plans for their workforce.

We would be happy to discuss with you the complex and evolving issues employers are navigating with the COVID-19 vaccinations. Contact the R+R HR consulting team for development of your company’s vaccine.

Katie Hall, PHR, Director, HR

katieh@reynoldsrowella.com With over a decade of diversified knowledge in HR, Katie has extensive hands-on experience leading HR initiatives including policy design, compensation, performance management, recruiting, compliance reporting, HR workflow development, training and development, and benefits administration. She assists R+R clients with recruiting and retaining quality staff and working closely with businesses in regards to their benefits, training and compensation programs

About Reynolds + Rowella

Reynolds + Rowella is a regional accounting and consulting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

Our mission is to operate as a financial services firm of outstanding quality. Our efforts are directed at serving our clients in the most efficient and responsive manner possible, delivering services that exceed the expectations of those we serve. The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, please contact Elizabeth Bresnan at 203.438.0161 or email.

Signed into law on December 27^th, the Consolidated Appropriations Act (the Act) extends and expands the Employee Retention Credit (ERC) that was enacted under the CARES Act to provide economic relief for businesses hit hard by the coronavirus pandemic 

Below is a summary of a few of the favorable retroactive changes to 2020:

The expanded and enrichened ERC is going to prove an extremely valuable credit for many businesses, especially so in 2021—particularly businesses that received PPP loans will be surprised that not only can they now participate, but they can even do so retroactively for 2020.

Please note that this information is current as of the date of publication. We will continue to provide additional in-depth updates around this matter.

If you have questions about any of the changes discussed above or need assistance please contact a R+R tax advisor.

About Reynolds + Rowella

Reynolds + Rowella is a regional accounting and consulting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

Our mission is to operate as a financial services firm of outstanding quality. Our efforts are directed at serving our clients in the most efficient and responsive manner possible, delivering services that exceed the expectations of those we serve. The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, please contact Elizabeth Bresnan at 203.438.0161 or email.