New Tax Credit Related to COVID-19 Vaccinations for Small Businesses

Yesterday, April 21,2021, President Biden called on employers across America to do everything they can to help their employees – and their communities – get vaccinated. As part of that effort, President Biden is calling on every employer in America to offer full pay to their employees for any time off needed to get vaccinated and for any time it takes to recover from the after-effects of vaccination. 

A tax credit for small and medium-sized businesses to fully offset the cost of paid leave for employees to get vaccinated and recover from any after-effects of vaccination. President Biden's American Rescue Plan provides a paid leave tax credit to offset the cost for businesses with fewer than 500 employees for up to 80 hours (i.e. 10 work days) up to $511 per day of paid sick leave offered between April 1 and September 30, 2021. This tax credit will allow employers to provide paid leave for employees to get a COVID-19 vaccination and for any time their employees may need to recover from that vaccination at no cost to the employer. The Internal Revenue Service released and posted a fact sheet to educate employers on how to claim the paid sick leave credit on their quarterly tax filings. For more details on how the paid leave tax credits from the American Rescue Plan will work for employers to enable employees to get vaccinated and recover from after-effects of vaccination, as well as for other purposes, please consult this snapshot from the Department of the Treasury.

Providing paid time off for vaccinations is an investment in the safety, productivity and health of an employer's own workforce and their community. No working person in this country should lose a single dollar from their paycheck to take time to get the shot or recover from it. The paid leave tax credit that President Biden signed into the law in the American Rescue Plan ensures that no small businesses or nonprofits will lose a single dollar by providing such paid leave to workers receiving a vaccination.

Building on the IRS release and the American Rescue Plan's provisions, the Administration is committed to expanding paid leave more generally. That's why the tax credit in the American Rescue Plan will enable employers with fewer than 500 employees to claim up to $17,110 for 14 weeks of paid leave for each impacted employee not only to get vaccinated, but also to take time off if they have COVID-19 symptoms and are going to the doctor, getting tested for COVID-19, under quarantine or isolation order by the government or a doctor (or are caring for someone who is), or have to care for a child whose school or child care provider closed due to COVID-19.