IRS and Treasury Clarify That FFCRA Tax Credits Extended By ARPA Can Be Used for Paid Leave to Get COVID-19 Vaccine

President Biden signed the American Rescue Plan Act (ARPA) into law on March 11, 2021. You can find more information about it here. ARPA extended the tax credits available for eligible employers who choose to continue to provide paid leave to employees under the Families First Coronavirus Response Act (FFCRA).  This week, the Internal Revenue Service (IRS) and the Treasury Department clarified details regarding the tax credits, including clarifying that credits may be claimed by eligible employers who provide paid leave for employees to receive or recover from any injury, disability, illness, or condition related to COVID-19 vaccinations. They published this fact sheet to help.

The IRS statement says that eligible employers can claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. They define an eligible employer as any business, including a tax-exempt organization, with fewer than 500 employees, a governmental employer, other than the federal government, and self-employed individuals.

Eligible employers may claim tax credits on their form 941 for leave from April 1, 2021, through September 30, 2021. Consult a tax professional for help.