Tax credit to cover cost of paid leave for small businesses extended
WASHINGTON, D.C. — Rep. Al Lawson recently announced that the IRS will continue to provide tax credits to help local small businesses cover the costs of paid sick and family leave for workers through September. Workers can also use leave to get their COVID-19 vaccinations and take time off to recover from any temporary side effects from the shot.
Through the American Rescue Plan that Lawson helped to pass, employers with fewer than 500 employees may receive up to $17,110 per employee to provide employees with up to 10 days of paid sick leave and up to 12 weeks of paid family leave, from April 1 through Sept. 30. Certain self-employed individuals in similar circumstances are entitled to similar credits as are schools, public hospitals and other state and local government employers.
“Small businesses were hit especially hard by the pandemic,” said Lawson. “This tax credit will help grow our local economy by keeping paychecks in pockets, businesses open and workers safe.”
Research has shown that states where employees gained access to paid sick leave through this tax credit experienced a slow-down in the spread of COVID.
Roughly six million businesses and more than 30 million workers are eligible for this credit. Businesses can find instructions for claiming credit at https://www.irs.gov/instructions/i7200.
