An update has been issued by the The Internal Revenue Service and the Treasury Department offering additional credits under the American Rescue Plan to help small businesses, including providing paid leave for employees receiving COVID-19 vaccinations.
Please reference this fact sheet for basic information about the employers eligible for the tax credits, as well as for how 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. For example, if an eligible employer offers employees a paid day off in order 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 (ARP) 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. Self-employed individuals are eligible for similar tax credits. The ARP tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through Sept. 30, 2021.
Self-employed individuals may claim comparable credits on the Form 1040, U.S. Individual Income Tax Return PDF. More details are available on this fact sheet and at this link to Learn more.