Families First Coronavirus Response Act (FFCRA)
The act provides relief to employees and employers with fewer than 500 employees.
Under this, the employers can grant leave for an employee to take care of covid-19 related needs.
The employers can claim two new credits for providing paid leave wages to their employees from April 1, 2020 to March 31, 2021 (Updated Jan 28, 2021)
- Paid sick leave credit
- Paid family leave credit
Paid sick leave credit
This is available for 80 hours (2 weeks) for full time employee and 2 weeks for part time workers.
The credit is only available if the employee cannot work due to:
- Federal, state or local orders related to covid-19
- Advise from a health care provider related to covid-19
- Experiencing covid-19 symptoms
- Caring for a person who is in quarantine due to federal, state or local orders.
- Caring for a child whose school or place of work is closed
- Experiencing similar conditions
Reasons 1, 2 or 3 above – These benefits are available at 100% or $511 per day or a maximum of $5110 for the employees own health
Reason 4 or 6 above – If the employee is on leave for caring for a family member then these are available at 2/3rd of the wages or $200 per day up to a maximum of $2000.
Paid family leave
Reason 5 above – If the employee is on leave to care for a child
1. whose school is closed due to covid-19 OR
2. childcare is unavailable due to covid-19
then the benefits are available for 10 weeks at 2/3rd of regular pay or $200 per day for a max of $10,000
Eligible employers can claim tax credits for leave taken from April 1, 2020 – March 31, 2020, on Form 941 or Form 7200 for an advance credit. Employers must maintain documentation to support each employee’s leave
Employers are required to report the amounts paid in a separate statement or on box 14 of W2 – Notice 2020-54
This is a summary and may not be applicable to everyone. Please consult your tax advisor. The original bill can be found at FFCRA
Disclosure: This material has been prepared for informational purposes only. It is not intended as a substitute for personalized professional advice. You should consult your own tax advisors or contact us if you need help with implementing any ideas shared on this page.