COVID-19 Paid Leave Tax Credits Include Employee Vaccinations

The Internal Revenue Service (IRS) and the Treasury Department recently released further details of tax credits available under the American Rescue Plan to help small businesses, including providing paid leave for employees receiving COVID-19 vaccinations.

The additional details, provided in a fact sheet by the IRS, include information about the employers eligible for the tax credits. It also provides information on how these employers may claim the credit for leave paid to employees related to COVID-19 vaccinations.

Eligible employers, such as businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers, can receive a tax credit for providing paid time off for each employee receiving the vaccine and for any time needed to recover from the vaccine.

The COVID relief law signed by President Biden in March allows small and midsize employers, and certain governmental employers, to claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations.

The tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through Sept. 30, 2021. The paid leave credits are tax credits against the employer's share of the Medicare tax.