HR1424-119

What This Bill Does

This bill doubles the employer tax credit for providing paid family and medical leave. Currently, employers can claim a credit of 12.5% to 25% of wages paid during leave; this bill increases that range to 25% to 50%. The bill also makes this credit permanent by removing its expiration date.

Who Benefits and How

Employers offering paid family and medical leave benefit from larger tax credits, potentially doubling their tax savings. This makes it more financially attractive for businesses to provide paid leave benefits. Employees also benefit indirectly, as more employers may be incentivized to offer paid family and medical leave programs.

Who Bears the Burden and How

Federal taxpayers bear the cost through reduced tax revenue, as employers will claim larger credits. The Congressional Budget Office would need to score the exact revenue impact, but doubling credit rates while making them permanent represents a significant tax expenditure.

Key Provisions

• Increases the minimum employer tax credit for paid family and medical leave from 12.5% to 25% of wages paid
• Increases the maximum credit from 25% to 50% of wages paid
• Doubles the incremental credit rate from 0.25 to 0.50 percentage points for each percentage point above minimum wage replacement
• Removes the expiration date (subsection f) making the credit permanent
• Takes effect for taxable years beginning after December 31, 2025