Townships that voluntarily provide paid sick and family leave to their employees due to COVID-19 between April 1, 2021, and September 30, 2021, are eligible to apply for federal tax credits. The paid leave may include leave taken by employees to receive or recover from COVID-19 vaccinations if your township approved this non-mandated benefit extension.
The federal tax credit reimburses employers for the cost of providing sick and family leave to their employees during this time frame due to COVID-19 or a COVID-19 vaccination. The credit applies to employers with fewer than 500 employees, including non-federal governmental employers such as townships.
The tax credits are applied against the employer’s share of the Medicare tax and are refundable, which means the employer is entitled to payment of the full amount of the credits if it exceeds the employer’s share of the Medicare tax. Townships may claim the tax credit when they file their quarterly federal Form 941. To learn more, click here.