Stimulus law extends tax credits for FFCRA leave through March

The 2021 Consolidated Appropriations Act, which became law in late December, extended a federal tax credit for employers that choose to continue providing leave under the Families First Coronavirus Response Act (FFCRA) until March 31, 2021. Read on to see our answers to the most common questions we received from employers after the FFCRA's "quasi-extension" and before any agency guidance was issued.

Background

Among the updates provided in its more than 5,500 pages, the federal stimulus law included the quasi-extension of the FFCRA leaves. So, what does that mean?

Employers covered by the initial FFCRA (those with fewer than 500 employees) may choose to provide 80 hours of Emergency Paid Sick Leave (EPSL) and/or up to 12 weeks of Expanded Family and Medical Leave Act (EFMLA) leave for the same reasons and under the same framework provided for by the laws, including federal reimbursement. In other words, employers may receive reimbursement for leave provided under the programs through March 31.

Burning questions

Question: Would employees who have already used some or all of their 80-hour EPSL allotment get a renewed bucket of the leave?

Answer: No. It appears employers can seek reimbursement under the program only for employees' unspent EPSL from the 2020 FFCRA leave allotment. You may not claim a tax credit for paid sick leave provided to employees who used their full 80-hour EPSL allotment in 2020.