Redpath Insights

Understanding the FFCRA: Tax Credit Opportunity and Compliance Issues

by Heather Larson, CPP

December 16, 2020 - The Families First Coronavirus Response Act (FFCRA), signed into law by President Trump in March 2020, requires certain employers to provide employees with paid sick leave and expanded family and medical leave for reasons related to COVID-19. The Act, administered by the U.S. Department of Labor, contains a provision for a payroll tax credit taken on IRS Form 941 by the employer.

The payroll tax credit, administered by the Internal Revenue Service, provides covered employers a dollar for dollar reimbursement for all qualifying wages paid under FFCRA, the portion of employer Medicare Tax paid on the qualifying wages and qualifying health insurance expense as it relates to the employee on leave. The three-part credit is applied against the employerโ€™s payroll tax liability on Form 941.    

In this video, Heather Larson, CPP provides an overview of why the FFCRA is relevant now and opportunities that you may have missed, including a review of areas to pay close attention to on Form 941 starting at two minutes and fifteen seconds. If you have further questions upon completing the video, we encourage you to reach out to your tax planning advisor for further assistance.

Heather Larson, CPP

Heather Larson, CPP

Heather Larson, CPP is a payroll manager focusing on non-attest services including bookkeeping, compiled financials, liquor and sales tax, and 1099 filings. Most of her time is spent working with business owners on a day to day basis to maintain their books, and help with payroll record keeping and processing, and assisting with general business processes.