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New Tax Credit for Employee Vaccination Leave

Credit covers recovery time as well.

In an effort to increase vaccination rates in every community and hasten economic recovery, the federal government is offering 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. 

The 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.

The federal government is also asking employers to incentivize vaccination for their employees and customers if that is appropriate for your business. Learn more or participate at this link.