New COVID-19 Stimulus Package Extends FFCRA Leave Tax Credit
With the passage of the new coronavirus stimulus, Congress also extended a key provision in the Families First Coronavirus Response Act. Find out what employers need to know about this tax credit provision heading into the new year.
What is the FFCRA?
When the COVID-19 pandemic hit the United States, Congress quickly passed two pieces of legislation: the CARES Act and the Families First Coronavirus Response Act (FFCRA). While the former dealt mostly with economic stimulus and small business assistance, the latter expanded family and medical leave and implemented emergency paid sick leave.
The FFCRA consisted of three main provisions:
- Coverage for COVID-19 Testing: Private group health plans must provide coverage and not impose any cost-sharing until the end of the national emergency period.
- Emergency Family and Medical Leave: The FFCRA expanded employee leave rules established in the Family and Medical Leave Act (FMLA). Among those updates are that certain employers provide two weeks of emergency paid sick leave if related to COVID-19, as well as expanded family and medical leave to employees through Dec. 31, 2020.
- Emergency Paid Sick Leave: Workers also qualified for paid sick leave if they were unable to work or telework due to several different coronavirus-related reasons.
New Coronavirus Stimulus Extends Leave Tax Credit
In late December 2020, Congress passed the Consolidated Appropriations Act to further address the economic devastation caused by the coronavirus pandemic. The bill was signed into law on Dec. 27, 2020.
One of the many provisions included in the bill—which is more than 5,000 pages long—is that Congress extended the FFCRA tax credit but not its leave provisions. (As a reminder, under the FFCRA, eligible employers are entitled to a fully refundable tax credit equal to the amount of qualified sick and family leave wages given to employees.)
Now, while employers are no longer required to offer FFCRA leave after Dec. 31, 2020, those that elect to continue providing it can reimburse these expenses through March 31, 2021. For more information on this tax credit, go to IRS.gov.
What’s Next for COVID-19 Relief?
President-elect Joe Biden has stated that more assistance is needed and that his administration plans to work with Congress to introduce additional support for families and employers. Depending on the vaccine rollout and economic fallout, more pandemic legislation (and the extension of existing legislation) may be in the cards in the near future.
Likewise, small businesses will likely be impacted by new Biden administration policies in the next four years, though nothing will be set in stone until after the president-elect takes office in January 2021.
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