Restrictions of the new paid leave tax credit

Posted 6/18/2018

The recent Tax Cuts and Jobs Act of 2018 promised a tax credit to employers, starting in 2018, on the wages that they pay to eligible employees during family and medical leave in an effort to encourage employers to offer paid leave. However, there are certain restrictions in the law which minimizes its benefit to employers including the stipulation that paid leave, for tax credit purposes, must be due to taking leave via the Family and Medical Leave Act. In other words, pay during the leave due to vacation, personal leave, or a medical leave is not considered for credit purposes.

Employee Benefit Adviser