Enhanced Tax Credit for Employers Offering Paid Family and Medical Leave.
This law expands and improves the tax credit available to businesses that provide paid family and medical leave to their employees. Employers gain new flexibility in calculating the credit, which is designed to encourage more companies, especially small businesses, to offer these benefits. Citizens may see an increase in the availability of paid leave options from their employers, although the credit only applies to employees working at least 20 hours per week.
Key points
Employers can now choose to calculate the tax credit based on either wages paid during leave or the premiums paid for an insurance policy covering the leave.
To qualify for the credit, the employee must customarily work at least 20 hours per week, excluding very part-time workers from the scope of the credit mechanism.
Government agencies (SBA and IRS) are mandated to conduct targeted outreach to ensure small businesses are aware of and utilize this enhanced tax credit.
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