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Your Business May Be Eligible for Vaccine PTO Tax Credits— Here’s What You Need to Know

06.16.2021

Are you taking full advantage of the tax breaks that may be available to your business?

Under the American Rescue Plan Act (ARPA), tax credits are available to small and midsize businesses, as well as certain governmental employers, who provide their employees paid leave for COVID-19 vaccine-related time off. This could include the time necessary to get the vaccine injection or recover from it afterward.

According to the Internal Revenue Service and U.S. Department of Treasury, employers are entitled to tax credits for paid sick leave equal to the employee’s regular pay rate for up to 80 hours, limited to $511 per day and $5,110 in the aggregate. Tax credits for paid family leave are also available, with eligible employers able to receive reimbursement equal to the family leave wages paid for up to 12 weeks, capped at $200 per day and $12,000 in the aggregate, at two-thirds the employee’s regular pay rate. The paid-leave credits are refundable against the company’s share of Medicare tax.

To be eligible, businesses must employ fewer than 500 employees. Employers may claim the credits on a quarterly basis by filing Form 941. Self-employed individuals can also claim similar tax credits on their individual tax return. The tax credits are available through September 30, 2021 for eligible employers paying vaccine-related sick and family leave.

Brown Smith Wallace can help your organization understand the nuances of the American Rescue Plan Act and ensure that you are capitalizing on the tax credits that may be available to you. If you have questions or need assistance, please feel free to reach out to Karen Stern, Partner in Charge, Entrepreneurial Services Group, at 314.983.1204 or kstern@bswllc.com.  

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