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What are the tax credits under the Families First Coronavirus Response Act (FFCRA)?

Posted by: Bonita Hatchett-Bodle    Apr 8, 2020 12:33:07 PM

Tax credits are available to employers between April 1, 2020, and December 31, 2020, for qualifying paid sick leave and expanded medical leave under the FFCRA. The credits are equal to 100% of the stated limit for the types of leave described below. The purpose of the tax credit is to enable employers to provide this paid leave without the additional financial burden during these difficult times.

COVID Emergency Sick Leave - Employee Self Care

Employers are entitled to a fully refundable tax credit equal to the following required paid sick leave. The Emergency Paid Sick Leave Act (EPSLA) requires employers to provide employees with paid sick leave if the employee is unable to work (including telework) due to any of the following:

  1. The employee is under a Federal, State, or local quarantine or isolation order related to COVID-19.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.

An employee who is unable to work for reasons due to a COVID-19 circumstance described in items 1-3 above is entitled to paid sick leave for up to two weeks (up to 80 hours) at the employee’s regular rate of pay, or, if higher, the federal minimum wage or any applicable state or local minimum wage, up to $511 per day and $5,110 in the aggregate.

COVID Emergency Sick Leave - Family Care

Employers are entitled to a fully refundable tax credit equal to the following required paid sick leave. The EPSLA requires employers to provide employees with paid sick leave if the employee is unable to work (including telework) due to any of the following:

  1. The employee is 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.
  2. The employee is caring for the child of such employee if the school or place of care of the child has been closed, or the childcare provider of such child is unavailable, due to COVID-19 precautions.
  3. The employee is experiencing any other substantially similar condition specified by the U.S. Department of Health and Human Services.

An employee who is unable to work due to a COVID-19 circumstance described in items 4-6 above is entitled to paid sick leave for up to two weeks (up to 80 hours) at two-thirds the employee’s regular rate of pay or, if higher, the federal minimum wage or any applicable state or local minimum wage, up to $200 per day and $2,000 in the aggregate.

COVID Child Care Emergency Family Leave

Employers are entitled to a fully refundable tax credit equal to the following required paid sick leave. The employee child care tax credit is available for a 10-week period, after the first two weeks of unpaid leave under the Emergency Family and Medical Leave Expansion Act (EFMLEA) that a qualifying employee can take to care of a child when schools or place of care are closed for a COVID-19 related reason. The maximum tax credit is two-thirds of the employee’s regular rate of pay up to a maximum of $200 per day or $10,000 total over the entire paid sick leave period.

Topics: COVID-19, Families First Coronavirus Response Act, EPSLA, EFMLEA, FFCRA

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