In March 2020, the FFCRA (Families First Coronavirus Response Act) required employers with fewer than 500 employees to provide paid sick and family leave to employees affected by COVID-19 and provided affected employers with a corresponding employment tax credit.
These provisions were originally in effect through 2020. The Act didn’t extend the mandate to provide FFCRA leave beyond 2020, but for those employers with 500 or fewer employees that choose to provide such qualified FFCRA leave wage payments, the Act extends the 100 percent tax credit for such payments through March 31, 2021.
The FFCRA limited the amount of sick leave wages eligible for the tax credit to $5,110 in the aggregate for care required for the employee; $2,000 for care that the employee provided to others, and $10,000 in family leave, if the employee is unable to work or telework because they are caring for family members whose school or child-care facility is closed. The Act doesn’t reset these amounts for 2021. Therefore, if such amounts were exhausted for an employee in 2020, any leave payments to that employee in 2021 wouldn’t qualify for the tax credit.
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