Details about how companies leave programs can qualify
The IRS has just released more details about the new paid family and medical leave business credit. An FAQ from the agency clarifies some of the key requirements companies must meet to collect the credit. Here are the highlights.
Wages and more
To claim the credit, companies must have written policy offering qualifying full-time workers at least two weeks of paid family and medical leave each year. The amount of leave can be prorated for qualifying part-time employees.
Qualifying employees are those who have been employed by a company for a year or more. Also, the person can’t have earned more than $72,000 in the past year.
In addition, to qualify for the credit, the wages paid to employees while they’re on leave can’t be less than 50% of their normal pay.
The credit is a percentage of the wages employees receive while they’re on leave.
The base percentage is 12.5% and it increases by 0.25% for each percentage point that the amount of wages paid to employees exceeds 50% of their regular wages. The maximum allowed credit is 25%.
Right now, the credit’s in effect for wages paid after Dec 31, 2017, and it ends Dec. 31, 2019.
For the purposes of the credit, paid family and medical leave is defined as leave given to workers for:
The birth and care of a newborn
Adoption or foster care placement
Recovery from a serious health condition
Caring for a child, spouse or parent with a serious health condition
Any urgent need that arises due to a worker’s spouse, child or parent being on covered active duty in the Armed Forces, or
Caring for a service member who’s an employee’s child, spouse, next of kin or parent.
Per the IRS, more info is coming to clarify when the employer’s written leave policy must be in place, how to determine if a worker’s been employed for at least a year, and how “family and medical leave” relates to other paid leave.
More info: bit.ly/leave553