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Biden Administration Promotes Paid Leave Credits for Vaccinations

Posted on Apr. 22, 2021

President Biden and the IRS went on a promotional blitz to draw attention to the expanded employer tax credits for providing paid leave to employees who obtain COVID-19 vaccines.

“No working American should lose a single dollar from their paycheck because they chose to fulfill their patriotic duty of getting vaccinated,” Biden said during an April 21 briefing at the White House on the status of vaccine distribution nationwide. “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.”

The same day, the IRS released a fact sheet with an accompanying release explaining broadly how the expanded tax credits work.

A provision of the American Rescue Plan Act of 2021 (P.L. 117-2) extends and expands upon the employer paid leave credit initially provided by last year’s Families First Coronavirus Response Act. The original provision allowed employers with fewer than 500 employees to receive a refundable payroll tax credit against the employer share of payroll taxes for voluntarily providing employees with paid leave related to COVID-19.

The new measure extends the provision through September 30 and adds additional qualifying reasons for employers to voluntarily provide paid leave, including for employees to obtain COVID-19 vaccinations as well as to recover from any ill effects from the vaccine. The provision offers the credits for up to 80 hours of wages, capped at $511 per day and $5,110 overall per employee.

“This new information is a shot in the arm for struggling small employers who are working hard to keep their businesses going while also watching out for the health of their employees,” IRS Commissioner Charles Rettig said in a statement.

The fact sheet indicates that the tax credits are available from April 1 through September 30, and it details how the credits are to be calculated as well as how employers are to claim them. It explains that if an employer does not have enough federal employment taxes set aside to cover the paid leave wages, it can request an advance payment of the credit.

Practically, the administration’s efforts amount to a “PR offensive, both to get the word out and to pat themselves on the back,” observed Joe Kristan of Eide Bailly LLP. To him, the provision was self-explanatory to begin with.

“I hadn’t been pining for guidance,” Kristan added.

Follow Jonathan Curry (@jtcurry005) on Twitter for real-time updates.

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