Paid Family and Medical Leave Employer Tax Credit made permanent under Fischer-led bill

U.S. Sen. Deb Fischer (R-NE) on Jan. 30 sponsored legislation that would make permanent the Paid Family and Medical Leave (PFML) Employer Tax Credit.

“Our new bill will encourage more businesses to offer paid family leave to more working Americans,” said Sen. Fischer, who sponsored the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act, S. 3680, with lead original cosponsor U.S. Sen. Angus King (I-ME).

The Tax Cuts and Jobs Act (TCJA) created a two-year general business tax credit for employers that voluntarily offer up to 12 weeks of PFML to employees. Congress has extended the credit through 2025. The credit also includes an income cap to ensure it remains targeted to employees who need it the most, according to a bill summary provided by Sen. Fischer’s staff.

“Americans shouldn’t have to choose between making ends meet and taking care of family — that’s why Senator King and I passed the first ever nationwide paid family leave law” as part of the TCJA,” said Sen. Fischer. “Now, we need to make that legislation permanent and expand access to paid family leave.”

Under current law, an employer must meet specific criteria to claim the credit. In addition to making the tax credit permanent, S. 3680 would make several changes to those criteria.

For instance, the bill would allow eligible employers to receive the credit for leave provided in states without PFML mandates or for leave offered in excess of any state or local mandate, and permit employers to claim the credit for premiums paid for PFML insurance products that cover qualifying employees, the summary says.

Among several other changes, S. 3680 would provide employers the option to offer PFML to employees at six months and better target the credit toward younger workers, and require more outreach and awareness about the tax credit.

“By making this extension permanent on a bipartisan basis, we’re prioritizing people over politics and supporting those who care for one another in times of need,” Sen. King said. 

The bill has garnered support from numerous entities, including the Nebraska Chamber of Commerce, the Nebraska Grocery Industry Association, the Nebraska Hospitality Association, the Nebraska Retail Federation, the American Council of Life Insurers, the Bipartisan Policy Center Action, the National Restaurant Association, and AARP, among many others.