New federal tax credit for employer-paid family and medical leave--

Is it an opportunity your Company should consider? -

Employers providing, or thinking about providing, paid family and medical leave may be able to structure their program to take advantage of a new tax credit added by the recent Tax Cuts and Jobs Act. The tax credit, which is available only for 2018 and 2019, equals the "applicable percentage" of wages paid to “qualifying employees” on family and medical leave for up to 12 weeks. The applicable percentage equals 12.5%, increased by 0.25% for each percentage point by which the leave's pay rate exceeds 50% of the employee’s wages. To avoid receiving a double tax benefit, employers must reduce their annual tax deduction for compensation paid to employees by the amount of any credit taken for paid family and medical leave.

In order to qualify for the credit, Section 45S of the Internal Revenue Code requires...