Tax Credits Available to Small Businesses Providing Vaccine PTO

Recently passed by Congress, the American Rescue Plan (ARP) allows small and midsize 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.

Businesses with fewer than 500 employees will be reimbursed for any paid time off they provide employees — up to $511 per day per employee – from April 1, 2021, through September 30, 2021.

Eligible employers report their total paid sick and family leave wages (plus the eligible health plan expenses and collectively bargained contributions and the eligible employer’s share of social security and Medicare taxes on the paid leave wages) for each quarter on their federal employment tax return, usually Form 941. Form 941 is used by most employers to report income tax and social security and Medicare taxes withheld from employee wages, as well as the employer’s own share of social security and Medicare taxes.

For more information and resources for small businesses, visit the IRS website.