FFCRA (Families First Coronavirus Response Act) is Paid-Covid-Leave. If you need to take off work between April 1 2020 and March 31, 2021, due to an eligible Covid-related reason, you get paid time off. W2 employees and self-employed / 1099 gig workers are all eligible.
How Much FFCRA Can You Get
First, you get one of these (Emergency Paid Sick Leave Act)
- Two weeks full pay (max $511 per day)
- If you have Covid (including seeking diagnosis) or need to quarantine (including government imposed lockdowns etc)
- Two weeks ⅔ pay (max $200 per day)
- If you need to care for someone else who is quarantining or your child’s place of care is closed
Then, you get (Emergency Family and Medical Leave Expansion Act)
- 10 more weeks paid leave at ⅔ pay (max $200 per day)
- If your child’s place of care is closed due to Covid
Rate of Pay
“Full pay” and “⅔ pay” is based on your regular rate of pay.
- Employees: Based on your regular rate of pay with your employer.
- Self Employed: To calculate your daily rate of pay, take line 31 of your Schedule C (your annual net income, or “salary”) and divide it by 260.
Which Schedule C? It can be based on either 2019 Schedule C or 2020 Schedule C – use whichever is higher 🙂
Maximum: You can get up to $12,000 if you are an employee and up to $10,000 if you are self-employed.
Who Can Get FFCRA
- Self-Employed / 1099 Workers
- You file a Schedule C as part of your tax return
- You were only eligible for the time you had to take off due to Covid, if you did not claim Unemployment for those days.
- Employees
- All of the following need to apply for all the days you are getting paid FFCRA
- You are working for a company
- For the first two weeks (Emergency Paid Sick Leave Act), you are eligible from day one of work
- For the following ten weeks (Emergency Family and Medical Leave Expansion Act), you are only eligible after being employed for this employer 30+ days
- The company is open
- You are not on Unemployment
- Company size
- The company has less than 500 employees. So if you work for a big company, you are not eligible.
- If you work for a company with less than 50 employees, you are eligible. However, if it will hurt the business if you take time off when your child is off school, your boss can refuse the leave (and you won’t get paid). If you are sick with Covid, however, your boss can’t refuse to give you paid time off.
- Mandatory vs Optional
April-Dec 2020 – mandatory for employers to offer it if they have 50 or more employees.
Jan-Mar 2021 – voluntary for employers to offer it (but it doesn’t cost them a penny – as they get fully reimbursed).
How To Claim FFCRA
If you work for a business with employees
You just need to tell your employer the dates that you’re taking off and why you’re taking off. Your employer will pay you, based on the rate above, and will be fully reimbursed with a tax credit.
It won’t cost your employer anything. They can either get it reimbursed after they pay it or they can ask for the money in advance. (Employers: talk to your payroll company for more details – you can request an advance refund using IRS form 7200.)
If you are self-employed
If you’re self-employed, who exactly is paying you for your time off? In this case, it’s simply a tax credit.
When you file your taxes, you request the money as a tax credit for all the days in the previous year that you had to take off work due to Covid. It’s called a “credit” but if you are owed more than you owe, you will get a refund. Keep a record for yourself of your time off.
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- If you took off days in 2020, when you file your 2020 taxes (in 2021).
- If you take off days in 2021, when you file your 2021 taxes (in 2022).
Mixed Earner – W2 and 1099
If you were not eligible for the maximum daily rate ($500/$200) from your employer, you can top it up when filing your own taxes. The maximum you would be eligible for is $10,000.
Can You Spread It Out
As a general rule, if you had to take off work due to Covid, you are meant to take the leave in one shot (to avoid spreading the virus).
Eligible reasons to take the leave intermittently
- If the reason you had to take off work no longer exists (e.g. lockdown stopped) and then the same or another reason caused you to have to take off work once again.
- If your child’s place of care is closed. Then, as long as your boss agrees, you can work intermittently (e.g. work Mondays, Wednesdays, and Fridays and take off Tuesdays and Thursdays or 90 minutes on followed by 90 minutes off).
FFCRA & Unemployment
You cannot get FFCRA and Unemployment for the same time period.
You need to be considered “employed” (just taking “paid sick leave”) in order to get FFCRA, whereas if you are collecting Unemployment, then you are “unemployed”.
FFCRA & PPP
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Employee
- As an employee, you are not eligible for PPP, so it does not affect you. Your boss will either get credits from PPP or FFCRA, and won’t lose out financially.
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Employer
- If you are using your 2020 payroll to calculate PPP amount, remove any FFCRA reimbursements before calculating your figures for PPP.
- If an employee claims FFCRA during your PPP covered period, make sure to remove the FFCRA payments from your payroll calculation for PPP forgiveness.
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Self-Employed/Gig Worker/1099
- Yes, you can get both PPP and FFCRA.
- PPP is also based on Line 31 of your Schedule C.
- If you claim FFCRA for days in 2020, then:
- If you claim PPP using your 2019 income, then it doesn’t affect your FFCRA.
- If you apply for PPP using your 2020 income, then you are meant to deduct the amount of FFCRA that you got from your Line 31 on your Schedule C when applying for PPP. So say you have $52,000 in line 31 on your 2020 Schedule C, and you are claiming the full $10,000 in FFCRA for 2020, then you likely should deduct $10,000 from your line 31 before asking for your PPP (so it would be $42k / 12 x 2.5 instead of $52k / 12 x 2.5
Based on the above, you might be better off using your Schedule C 2019 for your PPP even if your 2020 Schedule C is higher.
- Don’t use your PPP for days that you are claiming FFCRA. If you want to claim FFCRA after receiving PPP funds, pause your PPP covered period and continue after your FFCRA days.