Paid Family and Medical Leave Tax Credit Extension and Enhancement Act
Sponsored By: Representative Feenstra
Introduced
Summary
Expands the paid family and medical leave tax credit. This bill would let employers claim the credit as a share of wages paid to workers on leave or as a share of premiums for an employer-purchased leave insurance policy, and it clarifies who can claim the credit while broadening outreach.
Personalized for You
How does this bill affect your finances?
Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
6 provisions identified: 2 benefits, 1 costs, 3 mixed.
Choose wage or premium credit
This bill would let an eligible employer choose whether the credit is based on wages paid to workers on leave or on premiums paid for an in‑force paid‑leave insurance policy. For the premium option, the credit would use total premiums paid or incurred that year and the policy payment rate would ignore whether any employees actually took leave. The bill would also stop a tax deduction for the portion of premiums equal to the premium‑based credit.
Related employers treated as one
The bill would treat persons who count as a single employer under tax rules as a single employer for this credit. A person could avoid grouping only by showing the Secretary a substantial and legitimate business reason. The bill lists examples that do not qualify and limits acceptable reasons, so some previously separate employers may have to combine their claims.
More SBA and IRS outreach
The bill would require SBA district offices and partner centers to do targeted outreach about the paid family and medical leave credit. Outreach would include communications, training, technical help, and assistance writing a paid leave policy. The IRS would also be required to share information with payroll services, tax professionals, and small businesses.
When changes would start
If enacted, the bill's changes to the paid family and medical leave credit would apply to taxable years beginning after the date of enactment. This would determine when employers could first claim the revised credit and follow the new rules.
State or local pay excluded from credit
If enacted, leave paid by a State or local government or required by State or local law would still count as paid leave provided by an employer. But that state or local paid or mandated leave would not be counted when calculating the federal paid family and medical leave tax credit. This would prevent double counting of state/local paid leave for the federal credit.
Who counts as qualifying employees
The bill would let an employer meet the written paid‑leave policy time requirement by offering a policy effective in at least 6 months instead of 1 year. It would require pay used for eligibility to be figured annually, with pro‑rata rules for part‑time workers. It would also require qualifying employees to be customarily employed at least 20 hours per week.
Sponsors & CoSponsors
Sponsor
Feenstra
IA • R
Cosponsors
Rep. Bice, Stephanie I. [R-OK-5]
OK • R
Sponsored 2/5/2025
Rep. Perez, Marie Gluesenkamp [D-WA-3]
WA • D
Sponsored 2/5/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov