IRS Updates FFCRA Tax Credit FAQs November 25, 2020

On Wednesday, November 25, 2020, the IRS updated numerous frequently asked questions (FAQs) related to the tax credits for certain leaves under the Families First Coronavirus Response Act (FFCRA). Without providing an exhaustive list of the 50+ updates/clarifications, some of them include:

• New FAQs #20a-22c offering additional clarity on how to calculate the amount of the tax credit for qualified sick leave wages
• A new #25a with additional clarity on how to calculate the amount of the tax credit for qualified family leave wages
• Updated #31-36 to calculate the amount of qualified health plan expenses
• New sub-numbered FAQs #19a-g clarifying in more detail employers which are and aren’t eligible for tax credits
  • For example, newly added #19a clarified that even if an employer sometimes denied FFCRA leave for a health care provider or emergency responder as allowed under the FFCRA, any leaves they did honor are still eligible for the tax credit.
  • And newly added #19g clarified that tribal governments can be eligible for the tax credits even though other governmental employers (#19b) and instrumentalities (#19c) are not.

We know these are vital for employers to correctly claim, so it may be worth looking through all updates to see if any of them result in a change from what you had historically done.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.