Tax Credits Are Available For Complications That May Result From Vaccines

TAX CREDITS ARE AVAILABLE FOR COMPLICATIONS THAT MAY RESULT FROM VACCINES

The American Rescue Plan Act of 2021 (ARP) permits employers to claim tax credits if they provide employees paid sick and family leave related to Covid-19.  Both the leave and the tax credits are scheduled to expire on September 30, 2021. We are not aware of any legislation that will extend them.

Updated IRS FAQs issued on July 29, 2021, allow employers to receive tax credits for employees who accompany individuals receiving vaccination shot(s) or who are  caring for individuals who experience side-affects from vaccinations. If employees need to stay home after getting vaccinated, these tax credits are available at least until the end of September.  The IRS guidance is consistent with a full-out effort by the federal government to have all Americans vaccinated against COVID-19.

ELIGIBILITY

Small and midsize employers, including tax exempt and self-employed individuals, with less than 500 employees may apply for the credits on Form 941, Employers Quarterly Federal Tax Return.

STANDARD

In order to receive the credits, employers must pay employees who are unable to work (including telework) due to Covid-19, including those employees who receive the Covid-19 vaccination shot(s) or need to recover from any side-affects related to the shot(s).

EMPLOYER TAKEAWAYS

The updated IRS FAQs say that employers that provide leave for employees related to Covid-19 vaccinations, may also claim the credits for employees to assist “individuals.”  The IRS adopts the definition of “individuals” as family members; persons residing in the household; or persons with whom the employee has a “personal” relationship. The employee may accompany an individual to receive vaccination shot(s) or care for such person in recovery from side-affects.

Please let us know if you need any assistance obtaining the tax credits your business is entitled to.