By Lee Allphin, Employer Advantage Founder and Chairman of the Board
As part of Employer Advantage’s comprehensive suite of HR management and outsourcing services, we are assisting our clients in determining their best path during, and after, the Coronavirus pandemic. Please contact us if you would like assistance with any of your Employee Administration and Compliance responsibilities: Info@EmployerAdvantage.com | 877.476.9520
It is believed that for many working Americans, the main obstacle in the way of getting vaccinated is the concern of taking unpaid time off. With the race for herd immunity through vaccinations and the prediction that vaccination supply will soon outnumber those interested in getting the COVID-19 vaccine, the government has again turned to employers to help bridge the gap.
Funded through the American Rescue Plan Act of 2021, there is now an added incentive for employers of small and midsize businesses, and certain governmental employers, to help get their workforce vaccinated. Companies will be able to claim refundable tax credits to reimburse the costs associated with providing paid time off to employees getting vaccinated, as well as paid sick and family leave for employees needing additional time to recover if experiencing vaccine side effects.
These tax credits are now available to eligible employers from April 1, 2021, through September 30, 2021. Here are some of the major points:
- Employers with fewer than 500 employees, including those self-employed, are eligible.
- Employers are entitled to tax credits for wages paid for leave taken by employees who are not able to work or telework due to reasons related to COVID-19. This includes leave taken to receive COVID-19 vaccinations or to recover from any injury, disability, illness, or condition related to the vaccinations.
- The paid leave credits are tax credits against the employer’s share of the social security and Medicare tax. These tax credits are refundable, which means the employer is entitled to payment of the full amount of the credits if it exceeds the employer’s share of the social security and Medicare tax.
- The tax credit for paid sick leave wages is equal to the sick leave wages paid for COVID-19-related reasons, for up to two weeks (80 hours) and up to $511 per day.
- Eligible employers report their total paid sick and family leave for each quarter on their federal employment tax return, usually Form 941. Form 941 is used by most employers to report income tax and social security and Medicare taxes withheld from employee wages, as well as the employer’s own share of social security and Medicare taxes.
- In anticipation of claiming the credits on the Form 941, eligible employers can keep the federal employment taxes that they otherwise would have deposited.
- Self-employed individuals may claim comparable tax credits on their individual tax return Form 1040.
As is the case with the many government pandemic aid packages for businesses, employers will need to be diligent about documentation and the necessary applications to receive full tax credit reimbursement. Employer Advantage is standing by to help businesses take full advantage and navigate the accounting details.
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A New Path to HR Bliss – Trusted for more than 30 years, Employer Advantage frees you from the administrative and compliance burdens of having employees so you can focus on your business success. Versatile enough for companies of all sizes, our unique service combines comprehensive management of your employee administration and compliance with the latest software solutions, tailored to meet your individual needs and company culture. Our full-service management of Human Resources, payroll, health and benefits, workplace safety, and more, enhances your profitability while reducing the costs and risks associated with employment law compliance. We provide your employees with top-notch assistance and benefits that help you increase productivity, save time and money, and attract and retain a talented workforce. And for small and mid-sized businesses, we bring you economy of scale with access to Fortune-500-level benefits, specialty assistance, and savings that would not be possible to attain on your own. Headquartered in the Midwest and serving more than 500 companies and 10,000 worksite employees throughout the country, Employer Advantage is an IRS-Certified Professional Employer Organization (PEO) (CPEO). Experienced, certified, and trusted. www.EmployerAdvantage.com