H.R. 996 expands a tax credit that encourages businesses to provide paid family and medical leave to their employees. The bill allows employers to claim the credit either based on wages paid to employees on leave or based on insurance premiums paid for leave coverage, and it allows companies to choose a 6-month policy period instead of requiring a full year. The legislation also lowers the employee eligibility threshold from full-time to part-time workers earning at least 20 hours per week, and it clarifies that state-mandated leave benefits count toward an employer's leave program but don't reduce the federal tax credit amount. Additionally, the bill directs the Small Business Administration and IRS to conduct outreach and provide technical assistance to help employers understand and utilize the credit. The changes apply to tax years beginning after the bill's enactment.
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