Tax credits are available for private sector employers with fewer than 500 employees and state and local governments to cover the costs of providing employees with certain kinds of COVID-19 related leave taken from April 1, 2021 through September 30, 2021 pursuant to the federal American Rescue Plan (ARP). While employers are not required by federal law to offer paid leave for the listed COVID-19 related reasons, those who do may be able to have their costs fully reimbursed. These tax credits are also available to self-employed workers.
The IRS recently released new guidance on July 29, 2021, which clarifies that the ARP tax credits cover the cost of leave taken when a worker is accompanying someone to obtain the COVID-19 vaccine or when a worker is caring for someone who is recovering from conditions related to the COVID-19 vaccine. Additionally, ARP tax credits are also available for leave taken when a worker:
- has coronavirus symptoms and is seeking a medical diagnosis;
- is subject to a federal, state, or local quarantine or isolation order related to coronavirus;
- has been advised to self-quarantine by a health care provider due to coronavirus-related concerns;
- needs to care for their child because their child’s school or childcare has been closed or childcare is unavailable due to coronavirus;
- is caring for someone who is subject to a federal, state, or local quarantine or isolation order related to coronavirus, or who has been advised by a health care provider to self-quarantine due to concerns related to coronavirus;
- is seeking or waiting for results of a coronavirus test or diagnosis due to exposure or at their employer’s request (even if they are not symptomatic); or
- is obtaining or recovering from a coronavirus vaccination.
Paid leave continues to be a critical line of defense against the spread of COVID-19, especially for workers to get themselves and their loved ones vaccinated. Tax credits available through the American Rescue Plan offer an important tool to support employers who provide this much needed leave by reimbursing them for covered costs. For more information on the American Rescue Plan, click here.
Many workers throughout the country also have an affirmative right to sick leave specific to COVID-19 and the COVID-19 vaccine or permanent paid sick leave, which is earned over time. To learn more about what sick leave rights you may have, click here or call our free and confidential legal helpline at 1-833-NEED-ABB.
