IRS Clarifies ARPA’s $12,000 Cap for Qualified Family Leave Wages

It is likely that the Internal Revenue Service’s upcoming written guidance on the American Rescue Plan Act (ARPA) will specify that the act’s $12,000 per-employee cap on qualified family leave wages that count toward the associated credit is not offset by such wages paid before April 1, 2021, an IRS representative indicated April 1 during the agency’s monthly payroll industry teleconference.

Section 9641 of the ARPA established the new Internal Revenue Code Section 3132, which pertains to the credit for qualified family leave wages and specifies that the credit is available based on qualified family leave wages paid for leave ...