Guide to Get Paid With FFCRA Dollar-for-Dollar Tax Credit Offer

Manay CPA Blog | Tax and Accounting in the US

Initially, Paid Leave under the Families First Coronavirus Response Act (FFCRA) was set to expire on December 31, 2020. The federal government increased the FFCRA tax credit as part of the end-of-year stimulus package. Therefore, employers are no longer expected to have FFCRA effective January 1, 2021. However, if employers want to provide their workers with FFCRA paid leave benefits actively, they will still earn the dollar-for-dollar tax credits offered under the legislation until March 31, 2021.

What Is ‘’Families First Coronavirus Response Act’’ 

The Families First Coronavirus Response Act (FFCRA) was the first piece of federal government emergency legislation introduced in response to the latest coronavirus/COVID-19 outbreak. Employers are allowed to offer qualifying workers up to two weeks of paid sick leave and up to ten weeks of paid family leave under certain unique situations specifically related to the coronavirus effect.

There’s much uncertainty about what you need to grant workers who are not working this paid time off. Such benefits only apply if the condition of the employee falls under one of the following criteria:

  1. A state’s mandatory post-travel quarantine is included subject to a COVID-19-related federal, state, or local quarantine or isolation order.
  2. Advised to self-quarantine by a healthcare provider due to COVID-19 issues. Remember that their doctor may have recommended them to quarantine; sending the employee home or deciding to self-quarantine does not require compensation.
  3. Experiencing signs of COVID-19 and finding a medical diagnosis. They have to be symptomatic and seek medical care; it is unnecessary to qualify for pay to stay home from work as a precautionary measure.
  4. Caring for a person subject to a federal, state, or local quarantine or isolation order or advised to self-quarantine by a health care provider because of COVID-19 concerns. Again, quarantine has to be an actual order; it opts not only to stay home from an abundance of caution.
  5. If the child’s school or place of care is closed or the child care provider is unavailable due to a public health emergency, they must care for their child. This is the only case where the extra family leave of ten weeks occurs.

The legislation extends only to such absences connected to coronavirus; because of a company suspension, there is no lack of work. Only particular workers who are sick/quarantined, caring for a family member who is sick/quarantined, or a child whose school is closed are entitled under the legislation for paid time off. Eligible for unemployment are all those workers who suffer a loss of work due to the infection but not employer-sponsored paid time off under this statute.

 

 

 

Paid Time Off Benefits Given by the Families First Coronavirus Response Act

Sick Leave 

All employers with less than 500 employees are allowed to give all employees two weeks of paid sick leave or the hourly equivalent of an employee’s usual workload over the course of two weeks in some circumstances.

Employees are entitled to use paid sick days for a limit of 80 hours for the number of hours they work, on average, over two weeks. When the two weeks of vacation are used up, they do not have any more emergency sick days to use. This ensures that each time the employee has to be out for a covered cause, it is unnecessary to pay for two weeks.

What is the sick leave rate of pay?

If the employee is using sick leave because

  • they issued an exclusion or quarantine order from the federal, state, or local level because of COVID-19,
  • a healthcare professional has been told to self-quarantine because of COVID-19
  • has COVID-19 signs and pursues a medical diagnosis

Then the sick time hours are paid at the employee’s regular rate. The amount of pay is capped at $511 per day, up to $5,110 total per employee.

If the employee is using sick leave because

  • cares about someone under a quarantine or isolation order
  • the school is closed or child care providers are inaccessible due to COVID-19, and the employee cares for their child
  • a “substantially similar condition” as set out by the Secretary of Health and Human Services, along with the Secretaries of Treasury and Labor, also applies

Then the sick time hours are paid at ⅔ of the employee’s regular rate. The amount of pay is capped at $200 per day, up to $2,000 per employee. 

 

Family Leave

Employees are liable if they have worked for the company for at least 30 calendar days for the ten-week paid family leave benefit. Remember that for the two weeks of paid sick leave, no duration of work condition exists.

What is the family leave rate of pay?

An employee is entitled if

  • the employee has to take care of his minor child because the school of the child is closed or because the childcare provider is inaccessible owing to public health emergencies,
  • the employee is unable to work or work remotely

Then ⅔ the employee’s regular rate is paid for the number of hours the employee would otherwise be normally scheduled. There is a maximum payment cap of $200 per day and $10,000 in aggregate per employee. 

 

If your situation meets the requirements and you want to make sure you get the most credit available for you, give us a call at 404-900-1040 or request a free consultation.

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