FFCRA - Tax Credit Extension & Expansion (Effective April 1 - September 30, 2021)
The American Rescue Plan Act (ARPA) enacted on March 11, 2021, expands FFCRA payroll tax credits to eligible employers that provide COVID-19 sick pay provisions through September 30, 2021.
In addition, employee eligibility of up to 80 hours of emergency paid sick leave reset on April 1, 2021. This means that if employees have maxed out their 80 hours in 2020 through March 31, 2021, they are now eligible for up to another 80 hours of paid sick leave.
The Act also expanded qualifications for paid sick leave to include absences due to COVID-19 vaccinations.
ASAP Accounting & Payroll Clients: If you provide employer-paid health benefits, please provide us with that amount so we can correctly capture the Federal Credit Liability. If the employee contributes to a retirement plan, you will need to check with your plan provider to confirm if these earnings are eligible for contributions/match and let us know if we should be calculating in payroll.
FFCRA Sick Leave - $511 DAILY MAX SICK PLAN
Employees* taking leave are entitled to pay at either their regular rate or the applicable minimum wage, whichever is higher, up to $511/day and $5,110 in the aggregate (over a 2-week period).
Eligibility (one of the qualifications listed below):
- Is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 (review this guidance from the Wage & Hour Division to determine if your organization falls under this qualification)
- Has been advised by a health care provider to self-quarantine related to COVID-19
- Is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
- The employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 and the employee has been exposed to COVID-19 or is unable to work pending the results of the test of diagnosis**
- The employee is obtaining immunization related to COVID-19 or recovering form any injury, disability, illness, of condition related to such immunization*
* Part-time employees are entitled to leave hours equivalent to a 2-week average of hours worked or scheduled.
** Effective 4/1/2021
FFCRA Paid Sick Leave - $200 DAILY MAX SICK PLAN
Employees* taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 /day and $2,000 in the aggregate (over a 2-week period).
Eligibility (one of the qualifications listed below):
- Is caring for an individual subject to a Federal, State, or local quarantine or isolation order related to COVID-19
- Is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury
- Is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19
* Part-time employees are entitled to leave hours equivalent to a 2-week average of hours worked or scheduled.
FMLA Extended Paid Leave (eligible hours do not reset in 2021)
Employees* taking leave are entitled to pay 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 /day and $12,000 in the aggregate (over a 12-week period). This includes 80 hours of emergency paid sick leave.
Eligibility: Employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19
* Part-time employees are entitled to leave hours equivalent to a 2-week average of hours worked or scheduled.
FFCRA Credit FAQs
As of April 1, 2021, the IRS has not yet posted revised guidance reflecting these updates. Keep checking the IRS FAQs on COVID-19 Tax Credits for Paid Leave for updated guidance. In the meantime, here are some basic FAQs that the IRS updated on January 28, 2021 when the credits were first extended:
Which employers are eligible to claim FFCRA tax credits?
Businesses and tax-exempt organizations with fewer than 500 employees that pay “qualified sick leave wages” and/or “qualified family leave wages” under the EPSLA and/or the Expanded FMLA are eligible to claim FFCRA credits.
What are “qualified sick leave wages” for FFCRA credit?
Qualified wages for FFCRA credit are those paid by an eligible employer to an employee who is unable to work or telework because due to COVID-19 (e.g., under quarantine, has symptoms & seeking medical diagnosis, or caring for others who are quarantined or whose school or place of care is closed).
What are “qualified family leave wages” for FFCRA credit?
Qualified family leave wages for FFCRA credit are those paid by an eligible employer under the Expanded FMLA to an employee who is unable to work or telework because the employee is caring for a child whose school or place of care is closed or child care provider is unavailable for reasons related to COVID-19.
Are similar FFCRA tax credits available to self-employed individuals?
Yes. The FFCRA also provides comparable credits for self-employed individuals carrying on any trade or business within the meaning of section 1402 of the Internal Revenue Code if the self-employed individual would be eligible to receive paid leave under the EPSLA or Expanded FMLA if the individual were an employee of an employer (other than him or herself).For more information about how the credits apply to self-employed individuals, see "Specific Provisions Related to Self-Employed Individuals."For more information about how the credits apply to self-employed individuals, see "Specific Provisions Related to Self-Employed Individuals."
Disclaimer: This information is provided as a self-help tool and does not constitute legal or financial advice. Laws, regulations and lending products are changing daily and decisions as to whether or how to use this information and/or what actions to take in response to the Coronavirus Pandemic are solely those of the employer. The providers of this information disclaim any and all responsibility and liability for its accuracy, completeness or fitness for your particular business purposes.