IRS Reminds Small Employers of Tax Deduction for Offering Paid Vaccination Leave

Under the recently enacted American Rescue Plan Act of 2021, small and midsize employers with fewer than 500 employees may claim refundable tax credits that reimburse them for the cost of providing paid sick leave and family leave to their employees due to COVID-19, including leave taken to receive or recover from COVID-19 vaccinations, the IRS reminded companies today. The tax credits are available to employers who pay sick or family leave between April 1, and Sept. 30.

To claim the credit, eligible employers should report their total paid sick and family leave wages for each quarter on their federal employment tax return, usually Form 941, Employer’s Quarterly Federal Tax Return.