To amend the Internal Revenue Code of 1986 to increase the employer tax credit for paid family and medical leave.
Summary
What This Bill Does
H.R. 1424 increases the section 45S employer credit for paid family and medical leave. The minimum credit rate rises from 12.5 percent to 25 percent, the maximum rate rises from 25 percent to 50 percent, and the rate increase for higher wage replacement doubles from 0.25 percentage points to 0.50 percentage points. The bill also removes subsection (f), which under current law contains the credit's termination rule, and applies the amendments to taxable years beginning after December 31, 2025. It makes the credit more generous and more durable for employers that provide paid leave.
Who Benefits and How
Employers offering paid family leave benefit because a larger share of qualifying leave wages can be claimed as a tax credit. Workers needing family or medical leave benefit if the stronger credit encourages employers to offer or improve paid leave policies. Small businesses with paid leave programs benefit from a larger federal offset for wage costs. Paid-leave advocates benefit because the bill makes the employer credit more generous and removes the sunset provision.
Who Bears the Burden and How
Federal taxpayers bear the revenue cost of a higher paid-leave credit. The Internal Revenue Service must administer revised credit percentages and the removed termination rule. Budget writers must account for lower receipts from employers claiming larger credits. Employers claiming the credit must document qualifying leave wages and wage-replacement rates.
Key Provisions
- Amends section 45S to increase the minimum paid-leave credit rate to 25 percent.
- Amends section 45S to increase the maximum credit rate to 50 percent.
- Expands the credit-rate increment for higher wage replacement to 0.50 percentage points.
- Repeals the credit termination subsection and applies changes after December 31, 2025.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Amends the employer paid family and medical leave tax credit by increasing the minimum credit rate to 25 percent, the maximum rate to 50 percent, and the wage-replacement increment to 0.50 percentage points after 2025.
Key Policy Areas
Tax, Paid Leave, Labor
Primary Purpose
Amends the employer paid family and medical leave tax credit by increasing the minimum credit rate to 25 percent, the maximum rate to 50 percent, and the wage-replacement increment to 0.50 percentage points after 2025.
Policy Domains
Resolution provisions
Identified Gains
- Paid-leave employers
- Workers needing leave
- Small businesses
- Paid-leave advocates
Identified Costs
- Federal taxpayers
- Internal Revenue Service
- Budget writers
- Credit-claiming employers
Legislative Progress
In CommitteeMr. Mackenzie introduced the following bill; which was referred to …
Referred to the House Committee on Ways and Means.
Introduced in House
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Bill Structure & Actor Mappings
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