Paid family and medical leave credit for employers
Qualifying employers can benefit by claiming a credit for paid family and medical leave in 2018 and 2019. A new IRS fact sheet summarizes the requirements.
A paid family and medical leave credit is available to qualifying employers. The credit is 12.5% to 25% of up to 12 weeks of qualifying wages per year paid in 2018 and 2019. The credit will not be available for wages paid in 2020.
The types of family and medical leave include the birth of a child or caring for a family member with a serious medical condition. Other types of paid time off, such as vacation and sick leave, do not qualify for this credit.
To qualify to claim the credit, employers must have a written policy in place that provides for:
- At least two weeks of paid leave to full-time employees (pro-rated for part-time employees), and
- The paid leave must be at least 50% of the wages normally paid to the employee.
Employers use Form 8994, Employer Credit for Paid Family and Medical Leave, to claim the credit.
For more information, see:
- Notice 2018-71
- Form 8994 Instructions
- Employer Credit for Paid Family and Medical Leave FAQs
Originally published in the 12/11/19 edition of TAX in the News