Tax Credit Available to Small Businesses for Employee Vaccinations

Businesses and tax-exempt organizations with fewer than 500 employees can receive a tax credit for providing paid time off for employees receiving the COVID-19 vaccine and for any time needed to recover from the vaccine. 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.

The paid leave credits under the American Rescue Plan Act of 2021 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.

Following the recent announcement by President Biden, U.S. Chamber Small Business Policy vice president Tom Sullivan released the following statement:

“We know that the sooner more Americans are vaccinated, the sooner we can fully reopen our economy and the Main Streets across America. Providing this additional aid and resources for small businesses is necessary given all the hurdles these job creators have faced throughout the pandemic.

Employers of all sizes play an important role in making it easy for employees and those in their communities to get vaccinated. Helping employers get more people vaccinated, especially through worksite clinics, is a path forward for our country’s public health and economic strength.”

Additional information, including how to claim the credit, is available from the IRS.