Small Business Update: COVID-19 Vaccination Tax Credit

Last week, the Biden administration announced a new tax credit that would help businesses offer paid time off for employees to receive COVID-19 vaccinations. Additionally, the tax credit would cover time off if an employee needs time to recover from side effects.

During the April 26 Small Business Update, Jeanette Mulvey, Editor-in-Chief of CO—, spoke with Senior Advisor to the White House COVID-19 Response Team Andy Slavitt and U.S. Chamber Executive Vice President and Chief Policy Officer Neil Bradley about the vaccination tax credit and much more.

Here are some of the biggest takeaways from the conversation.

New tax credit available so employees with time off to get vaccinated

Bradley noted that the new vaccination tax credit is an expansion of the Families First Coronavirus Response Act, which became law in March 2020. The new tax credit applies to nearly all businesses and nonprofits with fewer than 500 employees. It provides up to $511 per day per employee for up to 10 workdays for time taken off between April 1 and September 30, 2021.

“Every barrier we can eliminate for people to get vaccinated just brings us that much closer to a healthier society and a healthier economy,” Bradley said. “This tax credit is administered by the IRS. In short, this is a refundable tax credit. You get to hold back what you normally would deposit [in payroll taxes] and withholding to reduce your tax liability.”

Bradley said employers could use IRS Form 941 to show they offset those costs and claimed the tax credits. Read more for the IRS about the vaccination tax credit here.

Companies can incentivize employees to get vaccinated

While many companies have declined to make COVID-19 vaccination mandatory (even if they legally can), some have provided other incentives to employees to do so. Slavitt said that there were numerous examples of companies that had provided incentives to employees who voluntarily received the vaccine. He pointed to grocery chain Kroger, which gave employees $100 gift cards if they showed proof of vaccination, as a positive example, and said the company had hit 75% of employees vaccinated.

He also said that companies that are helping employees and customers make appointments helps persuade anyone who may be on the fence because it’s not coming from the government.

“People are more likely to get vaccinated when they know other people who are vaccinated — people in their community and fellow employees — and they can talk to them about it,” Slavitt said. “It’s important that it does not come from the government. People want to make their own decisions and do their own homework. So things like this get them engaged and paying attention.”

Employers should provide employees with resources and information

Bradley said small businesses especially have a vital role to play in helping encourage vaccination.

“Perhaps the most important voices, as we try to help people get their questions answered, are the voices of their biological family and their employer family, particularly on the small business front,” Bradley said. “Everyone’s situation is different. They may not know where to turn. They may have simple questions like, ‘How can I get there?’ and ‘How can I take time off?’ Employers can help answer all of those questions. Small business owners have a role to play in this.”

Slavitt added that providing legitimate and reliable sources of information to employees was important as well.

“Making sure people get their questions answered — not on Facebook but from legitimate sources like their local doctor — is really important,” Slavitt said. “Allowing them to talk to other people who have been vaccinated really does help. … The vast majority of people will decide this is a good decision, and we just need to make it convenient for people.”

Big updates on grants for shuttered venues and restaurants

One other important part of the Small Business Update that was unrelated to the vaccination tax credit was the mention of two significant federal grant programs designed to help businesses in need. First, the Small Business Administration is now accepting applications for the Shuttered Venue Operator Grant program as of Monday, April 26. Any company that operates a live venue or serves a role in the performance arts industry is encouraged to apply for the grant right away.

Secondly, the Restaurant Revitalization Fund program that will provide $28.6 billion in grants to restaurants and bars in need is close to opening. The program will work to assist restaurants and bars that lost revenue in 2020 versus 2019. Applicants will apply through point-of-sale (POS) restaurant partners or the SBA’s online application portal. The official date for accepting applications has not been set yet, but Bradley suggested all potential applicants download the SBA’s sample application to help get ready to apply.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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