Welcome to this week’s installment on business taxation. Head over to our Youtube channel and take a look at these pieces from IRS.gov, the SHRM website, and the Nashville Business Journal to dive deeper.
For this week’s tax tip, we want to talk about the tax credits that are available to smaller employers for offering paid family leave for people to go get the Covid-19 vaccination.
Before we talk about that, here’s a quick update to something we posted about last week: the SBA is opening up its portal today, May 3rd, for the restaurant revitalization fund, so if you’ve been a restaurant impacted by the shutdowns in the pandemic, today you can go directly to the SBA portal to apply for some financial relief there.
Now on to this tax credit. If you’re an employer with fewer than 500 employees, including not-for-profits or even governmental entities, you can take a tax credit… it’s not an income tax credit but a payroll tax credit for the amount of payroll tax associated with the paid time off that’s applicable to the amount paid to the employees that took off to go get the COVID-19 shot. So if they took four hours off, and it’s a paid leave for them, then you would simply take the gross pay associated with that four hours, and then the social security and medicare taxes associated with that is the amount of credit you can claim directly. You can immediately reduce the tax deposit that you make for that and then report the credit when you file the quarterly payroll, so it’s a direct credit. It’s immediate credit, and depending on how many employees you’ve got, it could be a lot of money, especially if they take a whole day, because sometimes people have a reaction, and they get their shot in the morning, and they don’t feel so well the rest of the day.
As always, if you’ve got any questions about this or any other financial concerns, please give us a holler! We would love to speak with you.