What Employers Should Know About the Small Business Vaccine Tax Credit

From the U.S. Chamber of Commerce

Earlier this year, Congress passed the American Rescue Plan Act of 2021 (ARP), which included a tax credit for small employers that offered paid time off for receiving and recovering from the COVID-19 vaccine. This tax credit makes it easier for businesses to incentivize their workforce to get vaccinated, as well as give employees the proper time they need to get vaccinated and recover from it if they experience side effects. In July, the program was expanded to provide tax credits for employees who need time to take care of family members. 

The original employer tax credit for COVID-19 vaccine paid time off was announced in April 2021. It allowed eligible businesses and nonprofits to be reimbursed for up to 80 hours of paid sick leave or family leave (10 days or two work weeks) given to any employee to get vaccinated or recover from vaccination side effects. The reimbursement of $511 per day or $5,110 in total is deducted from the employer-portion of Medicare taxes and applies to paid time off taken between April 1 and September 30, 2021.

The July 2021 update to the ARP’s paid sick leave and family tax credits now allows employers to claim tax credits for paid time off given to employees to get vaccinated themselves or to accompany a family or household member to get vaccinated. It also includes paid time off for employees who need to take care of a family or household member that is recovering from vaccine side effects.

Click here for additional information from the U.S. Chamber of Commerce.