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Tax Credit for Vaccine PTO

Blog Tax 22

On Friday, April 23rd, 2021 the IRS and Treasury Department announced additional details relating to the credit for paid sick leave provided to employees due to COVID-19. In an effort to assist the nation recover from the pandemic, it has now been confirmed that small businesses (fewer than 500 employees) can claim this credit if they provide paid leave for their employees receiving the COVID-19 vaccination. Here is what you should know:

  • Eligible employers can receive a tax credit for providing paid time off for each employee receiving the COVID-19 vaccine and for any time off needed to recover from the vaccine.
  • The refundable tax credit is equal to the wages paid to employees for that day (or days) up to certain limits.
  • This credit is available for wages paid for leave from April 1, 2021, through September 30, 2021.
  • Claim this credit using your quarterly Federal Tax Return, Form 941.
  • Eligible employers can keep the federal employment taxes that would have otherwise been deposited up to the amount of the eligible credit.
  • Self-employed individuals are eligible for similar credits and can be claimed on their Form 1040.
  • Check out our Sick Leave Credit for the Self-Employed article for additional credit information.

Providing paid sick leave to your employees can provide a boost to company morale. If you are interested in this refundable tax credit, let your employees know to schedule their vaccine appointment but be sure to get it done before September 30th. Any days taken after that date will not qualify.

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