0
Paid Family and Medical Leave Tax Credit Extension and Enhancement Act
3/5/2025, 5:08 AM
Summary of Bill HR 996
Under this legislation, employers would be eligible for a tax credit if they provide paid leave to their employees for reasons such as caring for a newborn or adopted child, caring for a family member with a serious health condition, or dealing with their own serious health condition. The amount of the tax credit would be based on the wages paid to employees during their leave period.
The bill also includes provisions to ensure that the tax credit is targeted towards low and middle-income workers, as well as small businesses. Additionally, the legislation aims to streamline the process for employers to claim the tax credit and provide guidance on how to calculate the credit amount. Overall, the Family and Medical Leave Enhancement Act seeks to incentivize employers to offer paid leave to their employees for family and medical reasons, ultimately improving work-life balance and supporting the well-being of American workers.
Congressional Summary of HR 996
Paid Family and Medical Leave Tax Credit Extension and Enhancement Act
This bill makes the paid family and medical leave tax credit permanent, expands eligibility for the credit, requires outreach to increase awareness of the tax credit, and makes other changes to the credit.
Currently, an eligible employer may claim a tax credit (through 2025) for up to 25% of wages paid to a qualifying employee (who has worked for the employer for one year or more) while the employee is on family and medical leave.
The bill makes the tax credit for paid family and medical leave permanent and allows an eligible employer to claim the tax credit for 25% of either (1) wages paid to a qualifying employee while the employee is on family and medical leave, or (2) premiums paid for paid family or medical leave insurance.
The bill also
- allows an employer to provide family and medical leave to an employee who has worked for the employer for six months or more,
- provides that leave that is paid by a state or local government or required by state or local law must be taken into account in determining the amount of leave provided by the employer but may not be counted when determining the amount of the credit, and
- provides a limited exception to the requirements related to written family and medical leave policies.
Finally, the bill requires targeted outreach to employers and other relevant parties regarding the availability and requirements of the tax credit.
