The American Rescue Plan brings additional tax credits to the forefront for employers during tax season in a pandemic. The IRS and US Treasury Department announced that tax credits are available to help small businesses in their time of need.
The specific tax credit announced allows relief for businesses providing paid leave to their employees while they receive their first and second dose of the COVID-19 vaccine.
“This new information is a shot in the arm for struggling small employers who are working hard to keep their businesses going while also watching out for the health of their employees. Our work on this issue is part of a larger effort by the IRS to assist the nation recover from the pandemic.”
– Chuck Rettig, IRS COMMISSIONER
This tax credit is for businesses that meet the following criteria:
- Business size of 500 or fewer
- Provide paid time off for employees receiving the vaccine
- Provide paid time off for employees recovering from the vaccine
The tax credit is equal to the wages paid to employees while they were receiving and/or recovering from the vaccine. Businesses can claim these tax credits through Form 941.
Self-employed individuals may claim comparable credits on Form 1040 in their U.S. Individual Income Tax Return.
If you have any questions pertaining to this tax credit through the American Rescue Plan, please contact your CTBK service provider, or reach out to our firm directly.