Federal law currently gives employers a tax credit when they offer paid family or medical leave to employees — but the benefit has been capped and set to expire. This bill would double the credit percentage (from a 12.5% base to 25%) and raise the maximum credit from 25% to 50%, giving businesses a stronger financial incentive to provide paid leave. It would also make the credit permanent, removing the scheduled expiration date. The change takes effect for tax years beginning after December 31, 2025, and could expand access to paid leave for workers at companies that couldn't otherwise afford to offer it.
Corporate Benefits
- Employer paid-leave tax credit rate — Doubled from 12.5% to 25% base, with maximum raised from 25% to 50%
Transparency & Accountability
- Mandatory credit expiration review — Sunset clause removed, making the employer paid-leave tax credit permanent without scheduled congressional re-examination
Congressional Summary
This bill increases the business tax credit for paid family and medical leave to up to 50% (from 25%) of the wages paid by an eligible employer to a qualifying employee while the employee is on family and medical leave.Under current law, an eligible employer may claim a tax credit (through 2025) for between 12.5% and 25% of the wages paid to a qualified employee while the employee is on family and medical leave. The percentage of wages allowed as a tax credit increases proportionally, depending on what percentage of an employee’s normal wages is paid to the employee while the employee is on family and medical leave.The bill increases the tax credit to between 25% and 50% of the wages paid to an employee while the employee is on family and medical leave, depending on what percentage of an employee’s normal wages is paid to the employee while the employee is on family and medical leave.Under current law and the bill, an employer must pay at least 50% of the employee's normal wages while the employee is on leave to qualify for the tax credit.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-02-18
- Date Added
- 2026-05-01
- Source
- Congress.gov →
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