Employers who provide paid family and medical leave to their employees might qualify for a credit that can reduce the taxes they owe. It’s called the employer credit for family and medical leave.
Here are some facts about the credit to help employers find out if they might be able to claim it.
To be eligible, an employer must:
It’s available for wages paid in taxable years beginning after Dec. 31, 2017, and before Jan. 1, 2020.
The amount of the credit:
The credit is generally equal to 12.5 to 25 percent of paid family and medical leave for qualifying employees. The percentage is based on how much employers pay each employee for family and medical leave.
The leave can be for any or all the reasons specified in the Family and Medical Leave Act:
Claiming the credit:
To claim the credit, employers will file two forms with their tax return. These are Form 8994, Credit for Paid Family and Medical Leave, and Form 3800, General Business Credit.
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