New Tax Credit for Employers Who Provided Paid Family and Medical Leave in 2018

Amazon boxes stacked on the front porch, shiny gifts under the tree and yummy sweets just about everywhere — yes, the holidays are a magical time of wonderful surprises! And this year will be no exception for all of you good little employers out there who provided family and medical leave for your employees because YOU’RE getting a tax credit! 

Now, CPAs will tell us that the credit is equal to a percentage of wages you paid to qualifying employees while they were out on family and medical leave. The credit generally is effective for wages paid in taxable years of the employer beginning after December 31, 2017, and it isn’t available for wages paid in taxable years of the employer beginning after December 31, 2019.

And there’s a bit more fine print, including — To be eligible for the credit, an employer must have a written policy in place that includes:

  • At least two weeks of paid family and medical leave annually to full-time employees, pro-rated for part-time employees.
  • Pay for family and medical leave that’s at least 50 percent of the wages normally paid to the employee.

For purposes of this credit, family and medical leave includes leave for one or more of the following reasons:

  • Birth of an employee’s child and to care for the child.
  • Placement of a child with the employee for adoption or foster care.
  • Care for the employee’s spouse, child or parent who has a serious health condition.
  • A serious health condition that makes the employee unable to do the functions of their position.
  • Any qualifying need due to an employee’s spouse, child or parent being on covered active duty in the Armed Forces. This includes notification of an impending call or order to covered active duty.
  • To care for a service member who’s the employee’s spouse, child, parent or next of kin.

Holiday surprises like this are great and knowing about them is just one more way Moore Benefits helps you rule your world.  If you have any questions about this or aspect of your health plan or employee benefits, call my team of experts and we’ll be there to keep on surprising you year-round! 

Learn Moore:
Notice 2018-71 – Employer Credit for Paid Family and Medical Leave Frequently Asked Questions

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