August 2, 2021 9:54am
IRS Expands Employer Tax Credit to Encourage Vaccinations
With the Delta variant spreading rapidly across the U.S. and here in Greater Louisville, it has never been more important to get vaccinated. Over the past several months, GLI has encouraged businesses to offer incentives to employees and patrons to get vaccinated – whether it be time off, a bonus, or promotions. Earlier this week, the IRS and Treasury Department added an incentive for employers to champion vaccinations amongst their staff and their families with the expansion of the existing tax credit for employers to provide paid time off to employees for COVID vaccinations to include family members that get vaccinated. The employer tax credit originally launched in April as part of the American Rescue Plan Act but only incentivized employers to get the employees themselves vaccinated. The expansion will hopefully increase vaccination rates in the younger adult and teenage population.
The tax credit is the most beneficial incentive for employers themselves, however vaccinated individuals can get a free doughnut, have a shot at a million dollars, or win a free ride to a Kentucky college. However, research shows the most effective incentive to encourage vaccination might be providing paid time off for employees. A recent Kaiser Family Foundation survey found that nearly 20% of workers stated they have not been vaccinated because they are afraid of missing work or because they are too busy. That number jumps to 26% for black workers and 40% for Hispanic workers, two groups whose vaccination rates lag far behind national rates. It may seem like a small perk for workers who have the flexibility to work from home, but it could be a missing piece for millions of hourly employees to finally get the vaccine for themselves and their family members.
Newly released data from the Centers for Disease Control show that nearly 856,000 shots were administered nationwide on Friday and the seven-day average of reported vaccinations has riven by 26% as fears of the Delta variant spread. For employers and businesses who have been bolstered by a return to normalcy in the past few months, the expansion of this credit for paid time off for not only workers, but also their family members provides another tool to keep their workplaces and employees safe and continue the progress of our regional economic recovery.
It has never been more important to get our entire community vaccinated. The continued leadership of the business community in incentivizing vaccination for employees and patrons can make a tremendous impact to ensure that the economy can remain fully open as our community works toward herd immunity.
The IRS posted an updated set of FAQ, including information on how employers can claim the paid sick and family leave credits, which extends the credits taken through September 21, 2021.