The American Rescue Plan Act of 2021 (ARPA) allows businesses (including tax-exempt organizations), with fewer than 500 employees, to claim refundable tax credits 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.
The tax credits are available to eligible employers that pay sick and family leave from 4/1/21 through 9/30/21. The credits, which are refundable against the employer’s share of the Medicare tax, are reported on Form 941 (Employer’s Quarterly Federal Tax Return). Or, they can be claimed in advance by filing Form 7200 (Advance Payment of Employer Credits Due to COVID-19).
For additional details on eligibility and calculation of the credits, see the IRS’s fact sheet at www.irs.gov/newsroom/employer-tax-credits-for-employee-paid-leave-due-to-covid-19
