This tiny reddish colored cup-like fungus is called a Scarlet Cup or sometimes referred to as Scarlet Elf Cup. I personally like the reference to elves. It brings to mind tiny wood faeries sipping tea among the foliage of the forest.
These little mushrooms are quite common and have been found throughout the Northern Hemisphere, including North and South America, Africa, Australia, Asia and Europe. They were first described in 1772 by an Italian naturalist, Giovanni Antonio Scopoli, and was originally named Helvella coccinea. It has been called many different names throughout history, but phylogenetic testing attributes them to Sarcoscypha. Mushrooms in this category are distinguished from other mushrooms by the presence of oil droplets in their spores. There are several species within this genus and a microscope is needed to determine which species you are looking at. Most field guides and internet sources will list this as Sarcoscypha coccinea, but that is incorrect unless you live in the Pacific Northwest of the United States. In the Midwest and eastern United States you are finding Sarcoscypha dudleyi and Sarcoscypha austriaca.
These mushrooms are found in woodland settings often hidden in leaf litter clinging to moist sticks and branches. They may also appear to be growing out of the moist ground, but in actuality they are growing from buried sticks or logs that you cannot see. The most common time of year to see these little beauties is in late winter or early spring. They prefer cooler, damp weather for fruiting. Because of their diminutive size they are easily over-looked. Measuring a few millimeters up to a few centimeters in diameter they range in size from a small pea to a large marble.
Are they edible? It is unknown if they are edible or not, but because of their small size, tough texture and small distribution sizes they would not be a favorite for the dinner table. Even though they might not taste all that well, they were used for medicinal purposes by the Iroquois Indians. They would dry the tiny cups, and grind them up into a powder. This powder would be applied as an agent to stop bleeding , particularly in the case of newborn babies who's naval would not heal properly after the umbilical cord had been been severed. They would also use the powder to apply to wounds under bandages.
When you head out to the woods this spring looking for the ever elusive and tasty morel mushrooms, slow down and search a little deeper and you might find the tiny, but beautiful elf cups.