Tax credit to offset vaccination leave for small businesses

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Employees should not have to choose between losing wages or getting the COVID-19 vaccine, according to a new initiative to give small businesses a tax credit for paid time off.

Starting this week, a new tax credit (.pdf) will allow employees in businesses under 500 people to receive full pay for time taken to get the COVID-19 vaccine and any after-effects — up to 80 hours, the White House said in a news release.

That would mean a tax break up to $17,110 for employers. The credit is part of President Joe Biden’s American Rescue Plan, the $1.9 billion COVID relief package passed earlier this year.

Biden originally planned a goal of 100 million shots in his first 100 days in office, but the goal doubled within the first two months. The country was on track to reach that goal Thursday.

As more incentive to get even people vaccinated, Biden’s paid leave tax credit could help offset the cost for small businesses employers, representing half of all private-sector employees in America.

Employees would be eligible for up to 80 hours and would max out at $511 a day between April 1 and Sept. 30.

The president is calling on employers nationwide to offer full pay to their employees for any time off needed to get vaccinated, to recover from the shot’s effects if they are under quarantine order by the government or a doctor; or have to care for a child whose school or daycare is closed because of COVID-19. The time off is an investment for the safety, productivity and health of the workforce and community, the release said.

“The paid leave tax credit that President Biden signed into the law in the American Rescue Plan ensures that no small businesses or non-profits will lose a single dollar by providing such paid leave to workers receiving a vaccination,” the release said.

The tax credit comes just as vaccinations opened to every adult aged 16 and over throughout the U.S. and its territories.

“Paid leave has been shown to be a critical tool for stopping the spread of COVID-19, including one study that showed that the paid leave provisions put in place last year prevented approximately 400 COVID-19 cases per day and prevented one COVID-19 case per day per 1,300 workers,” the release said.

Employers can learn how to claim the paid sick leave credit on the Internal Revenue Services’ fact page.