How To Handle COVID Paid Sick Or Family Leave With Your Nanny, Caregiver Or Other Household Employee

If your employee needs to take paid time off or sick leave due to COVID, there are three simple steps for you to take.

Step 1:  Request your employee to fill out the following form so you have documentation, and keep it for four years.

Step 2: For the week that the emergency sick or family leave hours apply to, go ahead and create a pay stub for that week. It’s OK if you have regular hours and COVID hours. Enter the COVID hours in the “Paid Time Off” section as sick hours (If you don’t have the sick hours option showing, you need to set this up by going to “Team” at the bottom, click on your employee’s name, and “enable” sick hours under Paid Time Off).

Step 3: Text us the COVID sick hours and tell us the reason for the leave. We will adjust those COVID hours on our backend so they will be separate from regular sick hours. These COVID sick hours will be documented on your Schedule H at tax time so you receive the appropriate tax credit.

Additional resources on this topic:

Tax Credits for Paid Leave Under the American Rescue Plan Act of 2021: Determining the Amount of the Tax Credit for Qualified Sick Leave Wages

Understanding IRS Employer Credits for Coronavirus Paid Leave

IRS Guidelines On Tax Credit Documentation