How To Maximize All Your COVID-19 Tax Credits

Due to the abundance of small businesses in America, there has been a significant amount of support for them. According to the Small Business Administration, small businesses account for 99.7 of all employer firms in the country. 

Specifically, the Families First Coronavirus Response Act (FFCRA) provides assistance to small businesses like yours. Because the root cause of the economy shutting down was a virus, the government responded with the FFCRA. 

By paying your employees while they are on sick or family leave, you can get reimbursed in the form of refundable tax credits. These are some commonly asked questions regarding these tax credits.

What is a small business?

The FFCRA labels businesses with less than 500 employees as “Eligible Employers.”

Is there a limit to how much time off your employees can take?

Your employees are entitled to two different levels of time off. For the first category, they are eligible for up to 80 hours of paid sick leave. This is if your employee has to take sick leave due to COVID-19. 

Secondly, they may take an additional ten weeks of paid family leave. After schools shut down, many parents were left without a means for child care. This additional ten weeks will cover this scenario. 

How do my employees take it?

It’s one thing to understand it, the other is to be able to use it. Though you might be eager to let your employees use their time, do it through the proper channels. Otherwise, you might not get the tax credits. 

Account for whatever sick or family payouts you use through the Emergency Paid Sick Leave Act (EPSLA). This is the avenue you will take when your employees take their 80 hours of personal sick leave due to COVID-19. 

When your employees are on leave due to their family or for childcare, you will account for this through the Emergency Family and Medical Leave Expansion Act, also referred to as Expanded FMLA. 

Who is eligible?

The EPSLA is very specific as to who qualifies and what they are entitled to. 

If your employee is out due to a quarantine order, a doctor or health care provider’s advice, or because they are experiencing COVID-19 related symptoms and want to get a diagnosis through a test, then they will be eligible for up to 80 hours of paid sick leave. They are entitled to their full pay during this time. However, if the Federal and State minimum wage ($511 a day or $5,110 in total) is higher than their full wage, they receive that. 

On the other hand, if your employee needs to care for someone who falls under a quarantine order or needs to care for a child due to a school closure, they are entitled two weeks/80 hours at 2/3 of their pay. Like above, if the Federal or State minimum wage is higher ($200 a day or $2000 in total), they will receive that. 

For what period of time is this good for?

If your employees meet the requirements stated above, then you and they are entitled to the full amount of their paid sick and family leave if it occurs between April 1, 2020 and December 31, 2020. 


A big part of being an employer is tracking what comes in and out of your business. In terms of what we have discussed, you need to know—to the cent—what you’re paying your employees in paid sick and family leave. 

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