New PTO Tax Credits for COVID-19 Vaccines

April 22, 2021

Yesterday, President Joe Biden announced a new paid leave tax credit that will offset the cost for employers (with fewer than 500 employees) to provide full pay for their employees getting a COVID-19 vaccination or recovering from that vaccination.  

The tax credit for paid sick leave wages is equal to the sick leave wages for COVID-19 related reasons for up to 80 hours, up to $511 per day and $5100 in the aggregate, at 100 percent of the employee’s regular pay. The tax credit will offset the cost for businesses for paid sick leave offered between April 1 and Sept. 30, 2021. 

Overall, the tax credit will allow employers with fewer than 500 employees to claim up to $17,110 for 14 weeks of paid leave for each impacted employee –– not only for employees getting vaccinated, but also taking time off if they have COVID-19 symptoms, are getting tested, are under quarantine (or are caring for someone who is), or have to care for a child whose school is closed due to COVID-19.  

The Internal Revenue Service (IRS) released a fact sheet to educate employers on how to claim the paid sick leave credit on their quarterly tax filings. You can also read more about small business tax credit programs here.