What you need to know about the Families First Coronavirus Response Act

Tax Law and News tax reform

What is the Families First Coronavirus Response Act?

In response to the COVID-19 situation, the Families First Coronavirus Response Act (FFCRA) was passed. The act provides support to individuals and small businesses affected by COVID-19.

If your business client has fewer than 500 employees, they have access to three new provisions to help their business and employees during this time. The law went into effect on April 1, 2020, and expires on Dec. 31, 2020. If the business has fewer than 50 employees, your client may be able to get a waiver exempting the business from these new requirements.

How can my clients leverage the FFCRA?

Provide National Paid Sick Leave to employees due to COVID-19. National Paid Sick Leave allows your clients’ employees to get paid sick leave for these reasons:

  • They’re subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
  • They have been advised by a health care provider to self-quarantine related to COVID-19.
  • They’re experiencing COVID-19 symptoms and seeking a medical diagnosis.
  • They’re taking care of a family member who is sick or impacted with COVID-19.
  • They’re caring for a child because the child care provider is closed or unavailable for reasons related to COVID-19.

When a full-time employee is impacted, or sick from COVID-19 and quarantined, the employee can receive up to 80 hours of paid sick leave at 100 percent of the regular rate over a two-week period. Part-time employees can each receive pay for the average amount of hours they’d work over a two-week period.

When a full-time or part-time employee needs to take care of someone who is sick or impacted with COVID-19, they can receive up to 80 hours of paid sick leave at 2/3 of the employee’s regular rate of pay.

As the COVID-19 situation continues to evolve, the stipulations for an employee taking paid leave may change. If the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the secretary of Labor, they may use the paid leave.

Provide employees with public health emergency leave under the FMLA. Although the Family and Medical Leave Act (FMLA) traditionally has required employers to provide unpaid leave for qualifying circumstances, the FFCRA amended the FMLA to temporarily add a paid-leave requirement related to COVID-19.

After 10 days of unpaid leave, a period of paid leave would follow for employees who need to care for children younger than 18 whose school or child care facility is closed because of the virus, or whose child care provider is unavailable because of the outbreak.

This leave provision is available to all employees who have worked for the business for at least 30 days regardless of the number of hours worked. Employees can elect to use another form of leave to cover the first 10 days of unpaid leave, including the new National Paid Sick leave, but are not required to do so.

Use a Federal tax credit to pay for the cost of providing leave to employees. The business can apply for these tax credits when they run payroll. By entering this leave time in QuickBooks Online Payroll or QuickBooks Desktop Payroll, the business will be able to immediately apply 100 percent of the eligible leave wages to reduce and/or receive a refund of their Federal Payroll Tax liability amount due. This includes any health care premiums they pay on behalf of their employees.

For more information, visit Families First Coronavirus Response Act: Questions and Answers. The Intuit Accountant and Tax Professional COVID-19 Resource Center has more information and tools to help you and your clients navigate these challenging times.

Editor’s note: This article was originally published by QuickBooks Support.