Paid Sick Leave Credit Act of 2020

To allow a tax credit for employers under the Internal Revenue Code of 1986 for certain mandated paid sick leave. 1. Short title This Act may be cited as the Paid Sick Leave Credit Act of 2020 2. Payroll credit for required paid sick leave (a) In general In the case of a employer who elects (at such time and in such manner as the Secretary may provide) the application of this section there shall be allowed as a credit against the tax imposed by section 3111(a) (1) 90 percent of the qualified sick leave wages paid by an employer by reason of the requirements of section 2 of the Emergency Paid Sick Leave Act (2) the aggregate credits allowed under this section with respect to all prior calendar quarters. (b) Limitations (1) Wages taken into account The amount of qualified sick leave wages which may be taken into account under subsection (a) for the taxable year with respect to any individual shall not exceed— (A) for any day (or portion thereof) the individual is on sick leave during the taxable year, $511; and (B) in the aggregate for any four consecutive calendar quarters, $7,156. (2) Credit limited to certain employment taxes The credit allowed by subsection (a) with respect to any calendar quarter shall not exceed the tax imposed under section 3111(a) for such calendar quarter on the wages paid with respect to the employment of all individuals in the employ of the employer. (3) Carryover of unused credit If the amount of the credit under subsection (a) exceeds the limitation of paragraph (2) for any calendar quarter, such excess shall be carried to the succeeding calendar quarter and allowed as a credit under subsection (a) for such quarter. (c) Qualified sick leave wages For purposes of this section— (1) In general The term qualified sick leave wages section 51(c)(1) (2) Only additional paid sick time taken into account In the case of any employer with a sick leave plan in effect on March 12, 2020, only wages in excess of the wages the employer would have otherwise paid such employee (but for section 2 of the Emergency Paid Sick Leave Act (3) Sick leave wages must meet requirements of Act Wages shall not be taken into account under this section unless such wages meet the requirements of, and are required by, section 2 of the Emergency Paid Sick Leave Act (d) Special rules (1) Certain rules to apply For purposes of this section, rules similar to the rules of sections 51(i)(1) and 52 of the Internal Revenue Code of 1986 shall apply. (2) Related employers For purposes of this section, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of such Code shall be treated as 1 employer. (3) Denial of double benefit No deduction shall be allowed under such Code for the portion of wages paid or incurred for the taxable year which is equal to the sum of the credits determined under this section for calendar quarters ending in such taxable year. Rules similar to the rules under the second sentence of section 280C(a) of such Code shall apply for purposes of the preceding sentence. (e) Transfers to Federal Old-Age and Survivors Insurance Trust Fund There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 (f) Regulations The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including— (1) regulations to prevent the avoidance of the purposes of the limitations and aggregation rules under this subsection through the use of successor companies or other means, (2) regulations to minimize compliance and record-keeping burdens under this subsection, and (3) regulations 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). (g) Termination This section shall not apply to any wages paid more than 2 years after the date of the effective date of the Emergency Paid Sick Leave Act

Summary: Paid Sick Leave Credit Act of 2020 This bill allows employers a payroll tax credit for required sick leave paid to their employees. The credit is equal to the excess of 90% of sick leave wages paid pursuant to the Emergency Paid Sick Leave Act over the aggregate credits allowed to employers for all prior calendar quarters. The bill limits the amount of wages that may be taken into account for purposes of the credit to $511 for any day an employee is on sick leave and $7,156 in the aggregate for any four consecutive calendar quarters. The bill requires transfers to specified Social Security trust funds to cover any reduction in revenue due to the tax credit allowed by this bill.