Tax Credits Available for Providing Employees Paid Leave for COVID-19 Vaccinations

By Kevin Bell, Partner

COVID vaccine stock photo

Earlier this year, Congress passed the American Rescue Plan Act of 2021 (ARP). The Act provides a refundable tax credit for eligible employers that provide paid sick and family leave to their employees due to Covid-19. On Wednesday April 21, 2021, the IRS, in conjunction with President Biden, announced that employers that provide paid leave for employees to receive and recover from COVID-19 vaccinations are also eligible for these credits. The credits are only available for employers with fewer than 500 employees and is limited to wages paid between April 1, 2021 through September 30, 2021.The paid leave credits under the ARP are tax credits against the employer’s share of the Medicare tax. The tax credits are refundable, which means that the employer is entitled to payment of the full amount of the credits if it exceeds the employer’s share of the Medicare tax. The credit is claimed on the employer’s Form 941 Employer’s Quarterly Federal Tax Return.

For more information, click here to read the IRS Fact Sheet.

If you have any questions about this latest development, please contact us.