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Tax Credit Under the FFCRA for Employees Caring for Individuals Obtaining or Recovering from a COVID-19 Vaccination

On July, 29th, the Internal Revenue Service (IRS) announced that employers covered under the Families First Coronavirus Response Act (FFCRA) can claim federal tax credits when employees use emergency paid sick leave (EPSL) to accompany an individual to obtain a COVID-19 vaccination and/or to care for an individual recovering from an injury, disability, illness, or condition related to the vaccine.

Employers who voluntarily decided to extend EPSL through September 30, 2021, will now need to provide paid time off to employees for this reason. Leave for this purpose will fall under time off to care for another individual and would be paid at two-thirds the employee’s regular rate (calculated pursuant to the FFCRA’s standards), subject to the daily maximum of $200.

Next Steps for Employers

Whether employers can choose to voluntarily provide FFCRA leave to their employees for certain qualifying reasons and not for others has been an outstanding question. Unfortunately, this is not expressly addressed in the statute. Conservatively, employers should comply with all the covered reasons for leave under EPSL, rather than picking and choosing qualifying reasons. Employers who wish to pick and choose reasons for which they will offer leave under the EPSL should consult their legal counsel for additional guidance.

Additional information is available in the IRS’ FAQs on Tax Credits for Paid Leave Under the American Rescue Plan Act of 2021.

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.