The world is still struggling to get out from under the different variants of COVID-19. Governmental and public health officials are urging all Americans and their families to get the vaccination. You most likely hope your family members and employees will become vaccinated soon too. The current trend has more employers implementing vaccine mandates This trend is likely to increase as the vaccine gets its final approvals.
Encouragement for Employees Who Get Vaccinated
One way many business owners are encouraging their employees to get vaccinated is by offering paid time off to ensure workers and their families take time to get vaccinated. Employers who give employees paid time off for family-wide vaccinations are eligible for a tax credit. Employers who provide paid time off to employees who need to take time to recover from the vaccination or need to care for family members who deal with side effects are also eligible for the tax credit.
Don’t worry, if you are self-employed, you can get a similar tax credit, even if you have no employees. You still receive a similar tax credit for yourself or a family member who must deal with side effects. These credits can add up. The family leave and sick leave credits can add up to as much as $17,511 per employee or self-employed individual.
COVID-19 Vaccination Tax Credit Guidelines
The American Rescue Plan Act of 2021 qualifies a business for the sick and family leave tax credit if it:
- Has fewer than 500 employees
- Offers paid family or sick leave to employees through September 30, 2021 – and
- Has employees who took paid leave because of COVID-19. (This includes illness, getting tested or vaccinated, caregiving, or quarantine.)
If a business gives paid time off to get the vaccination or recover from it, both the sick and family leave credits are available. The guidance issued by the IRS for employers eligible to claim both credits include providing leave for employees who have:
- Accompanied a household member, family member, or other individuals to get the vaccination – or
- Cared for certain individuals, family or a household member, who are recovering from the vaccination.
The credit is not given for an employee who accompanies or cares for someone with whom they have no personal relationship. However, the employee credit is available for employees who accompany or care for:
- Immediate family members
- A person who resides in the home normally
- A person the employee has a relationship with that would indicate the expectation that the employee would provide care
Sick Leave Credit for Full-Time and Part-Time Employees
An employer can claim a sick leave credit that equals the employee’s regular wage when a full-time employee is allowed paid leave to deal with his own vaccination or its recovery. The credit is capped at $511 per day with a limit of $5,100.
When an employee takes time off work to care for another household members’ needs related to the vaccination, the credit is limited to just $200 per day up to $2,000. The sick leave credit has a 10 day, or 80-hour limit.
COVID-19 vaccination tax credits are also available for regularly scheduled part-time workers who work less than 40 hours a week. These employees may take paid sick, or family leave based on an average of the number of hours they are typically scheduled to work each week.
Sick Leave Tax Credits for Self-Employed Individuals
From April 1, 2021, to September 30, 2021, self-employed individuals are entitled to sick and family leave tax credits if they are unable to work due to:
- Getting the COVID-19 vaccination – or
- Recovering from an injury, illness, condition, or disability related to taking the vaccination
They are also eligible for the COVID-19 vaccination tax credit for sick or family leave if they care for a household member or family member who gets the vaccination. Self-employed individuals get the same sick leave credit as employers. They get a credit that equals 100% of their average daily pay, still capped at $511 per day.