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To amend the Internal Revenue Code of 1986 to increase the employer tax credit for paid family and medical leave.
3/13/2025, 11:03 AM
Summary of Bill HR 1424
Specifically, the bill proposes to increase the current tax credit for paid family and medical leave from 12.5% to 25% of the wages paid to employees during their leave. This increase in the tax credit is intended to make it more financially feasible for employers to offer paid leave to their employees, thereby promoting a healthier work-life balance and supporting families during times of need.
The bill does not mandate that employers offer paid family and medical leave, but rather provides a financial incentive for those who choose to do so. By increasing the tax credit, the bill aims to encourage more businesses to adopt policies that support their employees' well-being and allow them to take time off to care for themselves or their loved ones without sacrificing their income. Overall, the Family and Medical Leave Enhancement Act seeks to promote a more family-friendly workplace culture and ensure that employees have access to the time off they need to address personal and family health issues. It is a bipartisan effort to support working families and improve the overall well-being of American workers.
Congressional Summary of HR 1424
This bill increases the business tax credit for paid family and medical leave to up to 50% (from 25%) of the wages paid by an eligible employer to a qualifying employee while the employee is on family and medical leave.
Under current law, an eligible employer may claim a tax credit (through 2025) for between 12.5% and 25% of the wages paid to a qualified employee while the employee is on family and medical leave. The percentage of wages allowed as a tax credit increases proportionally, depending on what percentage of an employee’s normal wages is paid to the employee while the employee is on family and medical leave.
The bill increases the tax credit to between 25% and 50% of the wages paid to an employee while the employee is on family and medical leave, depending on what percentage of an employee’s normal wages is paid to the employee while the employee is on family and medical leave.
Under current law and the bill, an employer must pay at least 50% of the employee's normal wages while the employee is on leave to qualify for the tax credit.
