The Families First Coronavirus Relief Act (FFCRA)

What is Families First Coronavirus Response Act Leave?

When the pandemic struck, many small businesses could not afford to provide the additional sick leave that would be needed due to COVID-19 related illness or quarantine. Additionally, many schools closed in reaction to the pandemic, forcing countless parents to stay home with their children and support them with remote schooling. In many cases, these small businesses lacked the reserve funds needed to pay employees whose children were now at home, leaving them unable to return to work but with no income. As such, the Federal Government created the Families First Coronavirus Response Act (FFCRA) Leave which provides funds in the form of payroll tax credits to help alleviate the economic impact of needing to provide this leave.

Businesses have through 2024 to amend their past taxes to apply for this credit.

Is my business eligible?

If you have fewer than 500 employees, you can take advantage of the FFCRA. Even if you are a sole proprietor or self-employed and it is just you — you can take advantage of the program.

Did you have staff who needed time off in 2020 or 2021 for:

  • Coronavirus-19 (COVID) illness;

  • Quarantining because of a potential or direct COVID exposure;

  • Taking care of a family member with COVID; or

  • Taking care of your children because their child care provider or school was closed or limited to remote education?

If you answered yes to any of these questions, even if they were in the past, you may be able to qualify for federal funds.

How does it work?

The FFCRA covers leave taken between April 1, 2020 and September 30, 2021.

There are two types of leave available.

EMERGENCY PAID SICK LEAVE ACT (EPSLA)

First, the Emergency Paid Sick Leave Act (EPSLA) provides up to 80 hours of sick leave for employees:

  • At their regular rate of pay (up to $511 per day with a cap of $5,110 for the whole 80 hours) if the employee is quarantined for potential COVID-19 exposure or has COVID-19 symptoms.

  • At two-thirds their regular rate of pay (up to $200 per day with a cap of $2,000) if the employee is caring for someone under quarantine or a child (under 18) whose school or child care provider is closed or unavailable for reasons related to COVID-19. A school closure includes remote learning situations where the child is at home.

EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT (EFMLEA)

Second, the Emergency Family and Medical Leave Expansion Act (EFMLEA) provides up to 12 weeks of expanded family and medical leave with 10 of those weeks paid at two-thirds the employee’s regular rate of pay (up to $200 per day with a cap of $2,000) if the employee is unable to work (including telework) to care for a child whose school or childcare provider is closed due to COVID-19. A school closure includes remote learning situations where the child is at home.

How do I get reimbursed?

You get reimbursed through a “refundable tax credit.” That’s a technical way of saying the United States Treasury pays you using money from employment taxes. Think of this term as simply a “reimbursement” for the applicable wages.

Reimbursement is handled differently if the employee taking the leave is a “W-2 employee” or a sole proprietor/self-employed individual.

For W-2 Employees

You can get reimbursement for W-2 employees by revising past FORM 941 submittals using an amendment (FORM 941X and instructions).

For Sole Proprietors & the Self-Employed

It is important to know you can claim the credit for 2020 or 2021, even if you already submitted your taxes. You will need to ask your tax preparer to file a FORM 1040X (instructions for Form 1040X) and use Form 7202: Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals. To help you with this process, we have created a supplemental worksheet (see below or download here), which provides a way to share the data (and how to use the credit) with your tax preparer. You can also do this though the amendment process of most tax software programs.

What else should I know?

Employers may exclude healthcare providers or emergency responders from EPSLA and EFMLEA leave, and businesses with less than 50 employees can qualify for an exemption if the leave would jeopardize the viability of the business.

For more information and additional resources:

Visit the US Department of Labor website to learn more about FFCRA.

For more early care and education resources, please visit the Wisconsin Early Childhood Association (WECA) website. If you are not a member of WEESSN, click here to learn about the business training and support it offers. Ready to join WEESSN? Click here!

PRO TIP If you have a PPP, you cannot “double count” the money. Make sure that the salary you are counting for the FFCRA is not the same as the PPP. For example, if you are claiming PPP forgiveness for all your salary in May 2020, you cannot also claim an FFCRA.

PRO TIP If you have 500 or more employees, you’re not eligible to claim the credit for qualified paid sick and family leave wages.

Attachment A:

Supplemental Worksheet for Form 7202 IRS Credits for Sick Leave and Family Leave

In accordance with the Families First Coronavirus Response Act, sole proprietors must use Form 7202 IRS to report the number of days unable to perform services between the dates of April 1, 2020 through December 31, 2020 as a result of government-ordered closures, COVID-19 related self-quarantine, caring for an individual under quarantine, or caring for a child whose school, place of care, or childcare provider was unavailable due to COVID-19. Use the worksheet below to complete Form 7202 IRS and enter the resulting total on Line 12b on Schedule 3 (1040) Additional Credits and Payments as a qualified sick and family leave credit.

In the table below, enter leave taken between April 1, 2020 to September 30, 2021 due to COVID-19 related government-ordered business closures or COVID-19 related self-quarantine.

Enter the total on Line 1 of Form 7202 IRS.

In the table below, enter leave taken between April 1, 2020 to September 30, 2021 due to care of an individual under COVID-19 related quarantine, care of a child whose school, place of care, or child- care provider was closed due to COVID-19. (Note: A child must be under 18 years of age or incapable of self-care due to mental or physical disability.)

Enter the total on Line 2 of Form 7202 IRS.

Disclaimer: The information contained in this presentation has been prepared by Civitas Strategies on behalf of the Wisconsin Early Childhood Association and is not intended to constitute legal advice. The parties have used reasonable efforts in collecting, preparing, and providing this information, but neither Civitas Strategies Early Start nor Wisconsin Early Childhood Association guarantees its accuracy, completeness, adequacy, or currency. The publication and distribution of this presentation are not intended to create, and receipt does not constitute, an attorney-client relationship. Reproduction of this information is expressly prohibited.

This document uses, with permission, parts of previous guides created though the support of Maher Charitable Foundation, The Henry and Marilyn Taub Foundation, and the New Jersey Pandemic Relief fund. We thank them for their continued support of child care businesses.

Prepared by Civitas Strategies Early Start, December 2021, revised July 2022.

Attachment A: Supplemental Worksheet