As part of the 2017 tax reform reconciliation act, also known as the Tax Cuts and Jobs Act (TCJA), a tax credit opportunity is now available to businesses that provide paid family or medical leave to employees in 2018 or 2019.
The employer-paid family and medical leave credit (IRC Section 45S) is nonrefundable and may be used to offset federal income tax. However, determining eligibility and calculating the credit can be complicated.
Using our industry-leading tool, MaxCredits®, we’ll efficiently determine your company’s eligibility, calculate the credit amount, and provide a detailed report you can use for the federal income tax return. Here’s how it works.
To start, we’ll work with you to determine if your business qualifies. We’ll then do the following:
In addition to calculating the family and medical leave credit, MaxCredits has a web-based platform that can determine whether your business qualifies for other federal hiring credits, including:
Below, we break the information into more detail. Our professionals will efficiently determine the following, so you can focus on running your business.
To qualify for the credit, employers and employees must meet the below criteria.
Policies of qualified employers must be in place and provide the following:
Policies must also include leave that covers one or more of the following:
There are three criteria for eligible employees:
Calculation is based on the percent of wages paid during FMLA and can’t be calculated with the same wages used to calculate another general business credit.
Here are two examples of how the credit can apply to employees with different wages and paid family and medical leave benefits.
Discover how you can turn the Employer Paid Family and Medical Leave Credit into tax savings by filling out our complimentary benefits estimate request form. A Moss Adams professional will contact you with a preliminary estimate of the potential tax benefit to your organization.
Thank you. Your contact request has been received. We will be in touch soon.