Paid Family and Medical Leave Tax Credit Extension and Enhancement Act | ChamberLight
Bills · HR 996
IN COMMITTEE· 119TH CONGRESS
House BillHR 996Taxation
Paid Family and Medical Leave Tax Credit Extension and Enhancement Act
INTRO FEB 5· LAST ACTION FEB 5
READING
5MIN
COSPONSORS
2BIPARTISAN
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8
Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
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This bill matters because it aims to broaden access to paid family and medical leave for American workers by making it more appealing for employers to provide. Many workers currently lack paid leave, forcing them to choose between their paycheck and vital family or health responsibilities. By making the tax credit permanent and more flexible, this bill could lead to more businesses offering this crucial support.
If this bill becomes law, it could enable a greater number of employees to take necessary time off without financial hardship, improving family well-being and worker retention. If it doesn't pass, the existing tax credit would eventually expire, potentially reducing the incentive for employers to offer paid leave and leaving more workers without this critical safety net during significant life events.
KEY PROVISIONS
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PROVISION 01
Employers can now choose to calculate the tax credit based on either wages paid to employees on leave or the premiums paid for paid family and medical leave insurance.
This provides employers with more flexibility in how they can claim the credit, potentially encouraging wider utilization of the benefit.
PROVISION 02
The expiration date for the paid family and medical leave tax credit is removed, making it a permanent part of the tax code.
This provides long-term certainty for employers who offer or are considering offering paid leave benefits.
PROVISION 03
The definition of a "qualifying employee" is updated to include those employed for at least 6 months (if elected by the employer) and those who customarily work at least 20 hours per week.
This expands the pool of employees whose leave can qualify an employer for the credit, potentially extending paid leave access to more workers, including part-timers.
PROVISION 04
Benefits provided by state or local paid leave programs are not eligible for the federal tax credit.
This clarifies the interaction between federal and state/local leave policies, ensuring the federal credit only applies to employer-provided benefits beyond existing government mandates.
PROVISION 05
The Small Business Administration and the IRS are required to conduct targeted outreach to educate businesses and tax professionals about the availability and requirements of this tax credit.
This provision aims to increase awareness and utilization of the credit, especially among small businesses who may not be aware of such incentives.
This bill matters because it aims to broaden access to paid family and medical leave for American workers by making it more appealing for employers to provide. Many workers currently lack paid leave, forcing them to choose between their paycheck and vital family or health responsibilities. By making the tax credit permanent and more flexible, this bill could lead to more businesses offering this crucial support.
If this bill becomes law, it could enable a greater number of employees to take necessary time off without financial hardship, improving family well-being and worker retention. If it doesn't pass, the existing tax credit would eventually expire, potentially reducing the incentive for employers to offer paid leave and leaving more workers without this critical safety net during significant life events.
KEY PROVISIONS
AI-extracted
high
Employers can now choose to calculate the tax credit based on either wages paid to employees on leave or the premiums paid for paid family and medical leave insurance.
This provides employers with more flexibility in how they can claim the credit, potentially encouraging wider utilization of the benefit.
high
The expiration date for the paid family and medical leave tax credit is removed, making it a permanent part of the tax code.
This provides long-term certainty for employers who offer or are considering offering paid leave benefits.
med
The definition of a "qualifying employee" is updated to include those employed for at least 6 months (if elected by the employer) and those who customarily work at least 20 hours per week.
This expands the pool of employees whose leave can qualify an employer for the credit, potentially extending paid leave access to more workers, including part-timers.
med
Benefits provided by state or local paid leave programs are not eligible for the federal tax credit.
This clarifies the interaction between federal and state/local leave policies, ensuring the federal credit only applies to employer-provided benefits beyond existing government mandates.
med
The Small Business Administration and the IRS are required to conduct targeted outreach to educate businesses and tax professionals about the availability and requirements of this tax credit.
This provision aims to increase awareness and utilization of the credit, especially among small businesses who may not be aware of such incentives.
Taxable years beginning after the date of enactment of this Act
Amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act.
GLOSSARY
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Tax Credit
A direct reduction in the amount of tax owed, dollar for dollar. Unlike a deduction, which reduces taxable income, a credit directly lowers the final tax bill.
Internal Revenue Code (IRC)
The comprehensive set of tax laws in the United States, administered by the Internal Revenue Service (IRS).
Paid Family and Medical Leave
A program that provides workers with partial wage replacement when they need to take time off from work for specific family or medical reasons, such as caring for a newborn, a sick family member, or their own serious illness.
Eligible Employer
A business that meets specific requirements, such as having a written policy providing at least two weeks of paid family and medical leave, to qualify for the tax credit.
Qualifying Employee
An employee who meets certain criteria, such as length of employment and customary work hours, whose leave can count towards an employer's tax credit.
Taxable Year
The annual accounting period for keeping records and reporting income and expenses. For most individual taxpayers, it's the calendar year.
Premiums
ACTION TIMELINE
2 EVENTS
FEB 5, 25
Introduced in House
INTROREFERRAL
FEB 5, 25
Referred to the House Committee on Ways and Means.
The regular payments made to an insurance company in exchange for coverage. In this context, payments for a paid family and medical leave insurance policy.
Outreach
Activities designed to communicate information and provide assistance to a specific group, in this case, educating businesses about the tax credit.
