FFCRA Expiration and Extension of Tax Credit Availability Through March 31, 2021
Since April 2020, employers with fewer than 500 employees have been required under the federal Families First Coronavirus Act (FFCRA) to provide Emergency Family and Medical Leave (EFMLA) and Emergency Paid Sick Leave (EPSL) to qualifying employees in response to the COVID-19 pandemic. These provisions of the FFCRA expire on December 31, 2020, and employers are no longer required to provide FFCRA leave in 2021. However, a new stimulus bill signed on December 27, 2020, permits employers to continue to provide FFCRA leave in accordance with the FFCRA if they wish, and to claim the FFCRA tax credit through March 31, 2021.
Please note, however, that if an employer chooses to continue providing FFCRA leave beyond 2020, any FFCRA leave taken by an employee in 2020 would count against the original FFCRA leave limits for purposes of the tax credit. This means that if an employee exhausted their FFCRA leave in 2020, the employer would not be entitled to any additional tax credit if it allows the employee to take more leave than what was originally provided under the FFCRA.
Covered employers should decide whether they plan to voluntarily continue to provide FFCRA leave from January 1, 2021 through March 31, 2021. Employers should communicate their decision to all employees, including those currently out on FFCRA leave which will continue past December 31.
Even if an employer chooses not to continue providing FFCRA leave, employees may still be entitled to leave (paid or unpaid) under other laws such as the Federal Family and Medical Leave Act, state family/medical leave laws and/or state and local paid sick leave laws.
For previously published FFCRA guidance from the Department of Labor (DOL), please review the DOL FFCRA FAQs found here.
For previously published guidance from the IRS regarding COVID-19 related tax credits for paid leave provided under the FFCRA, please review the IRS FAQs found here.
We previously prepared a sample form to be used when employees request paid leave under the FFCRA. Please see the attached Template FFCRA CVOID-19 Leave Request Form.