As the U.S. nears 300 million vaccine doses administered, the Biden Administration is encouraging people to get inoculated as soon as possible. Yesterday, President Biden announced a new program to help small businesses vaccinate their workforce: a refundable tax credit that can offer over $5,000 per employee for business owners who offer paid time off for employees to receive and recover from their vaccine.
Who is Eligible for the Credit?
Small businesses with fewer than 500 employees can claim the tax credit if they offer their employees paid time off to get vaccinated.
In total, about half of all private sector employers in the U.S. will be eligible for the credit. The tax credit will cover time off for employees to get the shot itself, as well as any time they may need to recover, from April 1 to September 30th of 2021.
How Much is the Credit For?
For the 2nd and 3rd quarters of 2021, small businesses can claim tax credits for all wages paid for employees getting vaccinated, getting a COVID-19 test (or awaiting the results), recovering from a vaccine, or quarantining. The credits are used against the employer’s share of Medicare taxes and are refundable, which means that employers are entitled to payment of the full amount of the credits even if it exceeds their share of the Medicare tax.
Employers can claim a credit for up to 80 hours or ten days of paid sick leave at the rate of the employee’s regular wage. The credit is capped at $511/day, up to a total of $5,110 per employee. For most people, a day or two of recovery after getting vaccinated is sufficient, so the credit should cover all the leave your employees will need.
How Can You Claim It?
You can claim the credit for your small business on Form 941, the quarterly tax return for employers. You can even claim an advance of the credit if you need funds to pay your employees’ paid leave, by filing IRS Form 7200, Advance Payment of Employer Credits Due to COVID-19. You’ll receive the credit early, and note it when you file your next Form 941.
Conclusion: Allow Employees Time Off For Vaccination
Giving your employees time off to get their vaccines will help your business recover from the pandemic since vaccinated employees can return to work in person more safely. With the help of the new tax credit announced by the Biden Administration, it won’t cost you anything to allow your employees paid time off to get their shot. We will be sharing more vaccine and small business news on the Skip blog; follow along for more info!
📌 If you are eligible and hoping to get vaccinated, we have a guide available to finding a vaccine appointment here.
📌 You can also use our vaccine social tracker to see who in your immediate social circle has been vaccinated.
