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White House Announces New Paid Leave Tax Credit for COVID-19 Vaccinations

 
 
Yesterday, President Biden announced a new paid leave tax credit that will offset the cost for small- and medium-sized businesses to provide full pay for any time their employees need to get a COVID-19 vaccination or recover from side effects.

"No working American should lose a single dollar from their paycheck because they fulfilled their patriotic duty to get vaccinated," Biden said. "Every employee should get paid leave to get a shot. And businesses should know that they can provide it without a hit to their bottom line." 

This new tax credit will apply to nearly half of all private sector employees in America. Here's what you need to know about the program:
 
 
  • Businesses and nonprofits with fewer than 500 employees
  • Government employers other than the federal government
  • Self-employed individuals
For more information, the Department of the Treasury offers a Paid Leave Tax Credit Fact Sheet with additional details on eligibility and program guidelines.  
 
 
The paid leave tax credit will offset the costs for eligible employers for up to 80 hours of paid sick or family leave (i.e. 10 work days) up to $511 per day between April 1 and September 30, 2021.

The paid leave credits are tax credits against the employer's share of the Medicare tax. The tax credits are refundable, which means that the employer is entitled to payment of the full amount of the credits if it exceeds the employer's share of the Medicare tax.

Eligible employers are entitled to tax credits for wages paid for leave taken by employees who are not able to work or telework due to reasons related to COVID-19, including leave taken to receive COVID–19 vaccinations or to recover from any injury, disability, illness or condition related to the vaccinations.   
 
 
Business owners will be able to claim the tax credit on their quarterly tax filings. For more information, the IRS offers a fact sheet and additional resources to educate employers on program requirements and how to claim the paid leave credit.  
 
 
Tomorrow (Friday, April 23) at 12pm EDT / 9am PDT, our partners at Reimagine Main Street will host White House Senior Advisor Andy Slavitt for a special briefing about vaccines and the administration's new paid leave tax credit. 

Slavitt will be joined by Tom West, Deputy Assistant Secretary for Domestic Business Tax, Office of Tax Policy and Helen Morrison, Deputy Benefits Tax Counsel, Office of Tax Policy who will answer questions and provide more details about the mechanics of the new program.
 
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The Health Action Alliance is a joint initiative of the Ad Council, the Business Roundtable, the CDC Foundation, the de Beaumont Foundation, and the Robert Wood Johnson Foundation—in partnership with Meteorite. Together, we work to strengthen and accelerate the business community’s response to COVID-19, advance health equity and help rebuild public health. Learn more at healthaction.org.
 
 

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