To encourage more people to obtain the COVID-19 vaccines, the American Rescue Plan Act of 2021 permits eligible employers of small and medium-sized businesses to claim refundable tax credits to reimburse them for the cost of providing paid time off for employees to receive COVID-19 vaccinations and recover from any potential side effects related to the vaccines. The tax credits are available from April 1 through September 30, 2021. This means that employers who provided employees with paid leave before April 1, 2021 will not be reimbursed for the wages paid.
The IRS recently issued a fact sheet, FS-2021-09, April 2021, that describes which employers are eligible for the tax credits, the amount of the tax credits, how the credits are calculated and how eligible employers may claim the credits. Basic details explained in FS-2021-09 include: