Treasury Department Announces Paid Family & Medical Leave Credit | Financial Buzz

Treasury Department Announces Paid Family & Medical Leave Credit

The U.S. Department of the Treasury had announced that employers who provide paid medical and family leave for their employees may be eligible for compensation. According to the press release from the Treasury Department, employers who offer these forms of paid leave during the tax years of 2018 and 2019 will receive tax credits.

In order to be eligible for this credit, however, employers must offer two weeks of paid family and medical time off for full time employees, and a proportionate amount of time for part time employees. Employers must also provide at least 50% of an employee’s wage during the time off.

The credit an employer would receive is based off of a percentage of the wages paid to employees who are utilizing this paid leave. The minimum credit is 12.5% of the employees paid leave compensation and may reach a maximum of 25% depending on how much an employee receives during their time off.

In a statement by Secretary of the Treasury, Steven Mnuchin “Delivering relief to hardworking taxpayers and their families was a central goal of the Tax Cuts and Jobs Act. We expanded and strengthened paid family and medical leave, which are investments in the future of our workers, families and country”. While this is a step in the right direction, the paid family and medical leave is only required for employees who have not earned over USD 72,000 in the past year.