The IRS and the Treasury Department have announced 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, according to www.irs.gov.
Additional information provided in a fact sheet detail some basic facts about the employers eligible for the tax credits and how these employers can 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 any time needed to recover from the vaccine. For example, if an eligible employer offers employees a paid day off to get vaccinated, the employer can receive a tax credit equal to the wages paid to employees for that day (up to certain limits).
The American Rescue Plan Act of 2021 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 because of COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. Self-employed individuals are eligible for similar tax credits.
The tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through Sept. 30, 2021.