Paid Family and Medical Leave Tax Credit Extension and Enhancement Act
Sponsored By: Senator Fischer, Deb [R-NE]
Introduced
Summary
Enhanced paid family and medical leave tax credit that would let employers claim the credit either for wages paid to employees on leave or for premiums paid for a paid family and medical leave insurance policy, while expanding outreach and aligning premium deductions to avoid double benefits.
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- Families: Workers and their families could gain greater access to employer-provided paid leave because employers would have two clear ways to claim the credit, either for leave wages or for insurance premiums, which may encourage more employers to offer leave.
- Employers and multi‑entity businesses: Employers could choose a payroll‑based credit or an insurance‑based credit whose rate is set without regard to whether employees actually took leave. Related entities are generally treated as a single employer for the credit, with a narrow exception for substantial and legitimate business reasons.
- Small business support and administration: The Small Business Administration and Treasury would run targeted outreach to small business resource partners, payroll services, and tax professionals to promote takeup and help employers develop written PFML policies. The bill also prevents a double tax benefit by disallowing a deduction for the portion of premiums that is claimed as a credit.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 1 benefits, 0 costs, 1 mixed.
New paid leave tax rules for employers
If enacted, employers could choose how to claim the paid family and medical leave (PFML) tax credit. They could claim a share of wages paid to employees on leave or a share of PFML insurance premiums paid or incurred that year. For the insurance option, the credit rate would apply even if no qualifying employee took leave that year. Employers could set qualifying service to at least 6 months and must count employees who work 20 or more hours per week. The bill would stop employers from deducting the same part of premiums used to claim the credit and would not allow federal credit for leave paid or required by state or local governments. Related companies treated as one employer for tax rules would generally be combined for the credit unless they show a substantial, legitimate business reason. These changes would apply to taxable years beginning after the date of enactment.
SBA and IRS paid leave outreach
If enacted, SBA district offices and listed SBA partners would do targeted outreach, training, and technical help about the PFML credit. The Treasury or IRS would also include PFML credit information in regular communications to payroll services, tax professionals, and small businesses. These outreach activities would start for tax years beginning after enactment.
Sponsors & CoSponsors
Sponsor
Fischer, Deb [R-NE]
NE • R
Cosponsors
Sen. King, Angus S., Jr. [I-ME]
ME • I
Sponsored 2/4/2025
Sen. Marshall, Roger [R-KS]
KS • R
Sponsored 3/6/2025
Sen. Tillis, Thomas [R-NC]
NC • R
Sponsored 3/13/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov