health medical worker woman holding vaccine and syringe.

News Update: Recent Changes to Point-of-Hire Tax Credits

On Wednesday, April 21, 2021, President Joe Biden announced a refundable tax credit available for select businesses that pay employees that need to take time off to get vaccinated for COVID-19.  This is part of the administration’s effort to involve employers to promote vaccination.

“Today we hit 200 million shots,” Biden said. “It’s an incredible achievement for the nation. I’m calling on every employer, large and small, in every state to give employees the time off they need with pay to get vaccinated,” said the President.

Here’s what we know about it so far:

  • The tax credit will apply to businesses with fewer than 500 employees
  • The tax credit amount equals up to two weeks (80 hours), limited up to $511 per day for each employee, and $5,110 in the aggregate at 100% of the employee’s pay rate
  • The tax credit is available between April 1 and September 30, 2021. 
  • Tax credit is refundable, meaning the employer is entitled to payment of the full amount of the credit if the tax credit amount exceeds the employer’s share of the Medicare tax
  • Employers can claim the credit on using IRS Form 941 – Employer’s Quarterly Federal Tax Return

This tax credit was authorized under The American Rescue Plan Acct of 2021 (ARP) which was signed into law on March 11, 2021.

 

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