Source: United States Senator for Nebraska Deb Fischer
Today, U.S. Senators Deb Fischer (R-Neb.) and Angus King (I-Maine) reintroduced the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. This bipartisan, bicameral legislation will make the Paid Family and Medical Leave (PFML) Employer Tax Credit permanent, helping companies of all sizes offer PFML plans to their employees.
Senators Fischer and King established the country’s first-ever nationwide PFML policy, which wasincluded in the 2017 Tax Cuts and Jobs Act and implemented in 2018. The Senators’ legislationbuilds on the 2017 law to better serve working families and hourly workers. It also provides additional ways for businesses to qualify for the paid leave tax credit, such as paying for PFML insurance products, and requires greater outreach efforts to raise awareness about the credit.
U.S. Representatives Randy Feenstra (IA-04), Stephanie Bice (OK-05), and Marie Gluesenkamp Perez (WA-03) will introduce identical companion legislation in the House.
“America’s working families drive our economy forward and strengthen our communities. They shouldn’t have to choose between earning a paycheck and caring for their loved ones. That’s why Senator King and I passed the first-ever nationwide paid family leave law. Now, we need to make our legislation permanent and expand access to ensure that even more businesses can provide paid family leave to the workers who keep them running. I’m determined to get this key legislation included in whatever tax package Congress considers this year,” said Senator Fischer.
“I have often said that Maine is one big town with long roads and when a member of our community is hurting, we drop everything to take care of our own. However, no one should have to choose between caring for our families or receiving the next paycheck to put food on the table,” said Senator King. “That’s why I’ve been working with my Republican colleague, Deb Fischer of Nebraska, to introduce the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act which makes the PFML tax credit permanent. When families have access to care, they are able to succeed both at home and in their professional careers. Child care is more than a household priority; child care means business!”
“Paid family and medical leave (PFML) is a lifeline for workers when facing a medical condition or welcoming a newborn into the world. The Tax Cuts and Jobs Act recognized the importance of PFML by helping American small businesses offer these benefits to their employees through the creation of a targeted tax credit specifically for small businesses. However, along with many other policies, this provision expires at the end of the year without action from Congress,” said Congressman Feenstra. “That’s why I introduced legislation to extend and improve this tax credit for our small businesses so that they can provide their workers with up to 12 weeks of PFML without missing a paycheck. As a member of the House Ways and Means Committee, I believe that, by making this policy permanent, we can deliver certainty for our small businesses, keep our workers healthy and employed, and grow our economy and rural communities.”
“The 45S tax credit, first implemented under the Trump administration, has been instrumental in helping many employers expand paid family leave benefits for their workers. However, awareness and uptake of this credit have been lower than we’d like. This legislation, which I’m pleased to introduce alongside my colleagues, will improve the credit, make it more flexible, increase employer awareness, and make the tax credit permanent,” said Congresswoman Bice.
“Taking care of your health, newborn, or family when they’re most in need shouldn’t come at the cost of paying the bills. Strong families mean strong communities and local economies,” said Congresswoman Gluesenkamp Perez. “With the paid family and medical leave tax credit due to expire, our bipartisan legislation will make this successful credit permanent and expand access for Washington-based businesses and newer employees, so more families can feel the benefits.”
Nebraska Stakeholder Support:
“The Nebraska Chamber is committed to making Nebraska the best place to own, operate and grow a business, and this bill brings us one step closer to achieving that. The Paid Family and Medical Leave Tax Credit represents Nebraska business owners’ desire to strengthen the state’s overall workforce. The NE Chamber and businesses across the state appreciate Senator Fischer’s continued leadership on this issue,” said President of the Nebraska Chamber of Commerce Bryan Sloane.
“The Lincoln Chamber of Commerce appreciates Senator Fischer’s leadership in her efforts to empower small businesses to provide paid family and medical leave. Senator Fischer’s continued efforts by way of introducing her Paid Family and Medical Leave Tax Credit Extension and Enhancement Act is a continuation of her commitment to employers, employees, families, and communities. We view this crucial policy initiative as something that should be included in any larger pro-growth tax policy package that might be considered,” said Lincoln Chamber of Commerce President Jason Ball.
“The Greater Omaha Chamber is grateful to Senators Fischer and King for introducing this important legislation. While a broad representation of our membership offers various types of paid leave, incentives will matter to companies and businesses who have greater barriers to offering paid leave, especially our smallest members. This proposed legislation allows us greater opportunities to care holistically for employees the way we strive to, and aligns with the Chamber’s mission,” said Greater Omaha Chamber President and CEO Heath Mello.
“The Nebraska Grocers and all our affiliates thank Senator Fischer for her commitment to businesses, families, and communities. By embracing incentives, rather than imposing burdensome and impractical mandates, this Act recognizes that business owners want to provide flexibility to their most valuable resource – their dedicated employees. The Paid Family and Medical Leave Tax Credit Extension and Enhancement Act is genuinely helpful, responsible policymaking which empowers both employers and employees,” said Nebraska Grocery Industry Association Executive Director Ansley Fellers.
Full List of Nebraska Endorsements:
Nebraska Chamber of Commerce, Lincoln Chamber of Commerce, Greater Omaha Chamber of Commerce, Mutual of Omaha, Nebraska Grocery Industry Association, Nebraska Hospitality Association, and Nebraska Retail Federation.
National Stakeholder Support:
“AARP, which advocates for the more than 100 million Americans age 50 and older, is pleased to endorse the bipartisan Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. This legislation will provide consistency and certainty to businesses by making tax credit 45S permanent. In addition, the proposed enhancements to the credit will encourage more employers to provide this important benefit to support working family caregivers with low to moderate incomes,” said AARP Senior Vice President of Government Affairs Bill Sweeney.
“Too many people today face the difficult choice between earning a paycheck and caring for themselves or family member. Senators Fischer and King are offering a bipartisan solution that will go a long way toward helping working families facing this dilemma. The enhanced tax credit will enable more employers—especially small employers— to offer their workers a paid family and medical leave benefit. It also will help more people access this benefit by making it easier for employers to qualify for the credit. Most important, the legislation gives people peace of mind knowing they’ll be protected from economic loss when taking time off from work to care for themselves or a loved one. We applaud Senators Fischer and King for advancing this legislation that offers working Americans the help they want and need,” said American Council of Life Insurers President & CEO David Chavern.
“Over the last year, the AICPA has worked closely with staff from both Senator Fischer and Senator King‘s offices on important legislation that would help families and middle income households by allowing more employers to offer the benefit of paid family and medical leave to their employees by making the tax credit permanent. We applaud Senators Fischer and King for their thoughtful and consistent leadership on this bill and offer our strong support,” said American Institute of Certified Public Accountants Vice President of Tax Policy & Advocacy Melanie Lauridsen.
“Benefits like paid family leave help restaurant operators recruit skilled hospitality professionals. Making the Paid Family, Medical Leave tax credit program pilot permanent would support the growth of the small business operators who are considering or offering PFML. In the current economy, we appreciate Sens. Fisher and King’s efforts to support small business restaurant owners and their employees by continuing this program,” said National Restaurant Association Executive Vice President of Public Affairs Sean Kennedy.
“NFIB thanks Senator Fischer and Senator King for introducing the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. Incentivizing small business owners to offer paid family and medical leave rather than penalizing them for failing to provide a benefit that they cannot afford is a wise policy for the small business owners,” said National Federation of Independent Businesses Vice President Federal Government Relations Jeff Brabant.
“BPC Action is proud to endorse the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act to make permanent and expand the employer tax credit for paid family and medical leave, known as 45S, and applauds Sens. Deb Fischer (R-NE) and Angus King (I-ME) for their bipartisan leadership on this bill. As BPC has found, ‘In an ever-changing economy and tight labor market, paid family and medical leave can importantly encourage workers to stay in the labor force, support household finances, and help businesses compete for workers.’ This bill is critical to helping businesses provide paid leave benefits to more hardworking American families. We urge Congress to take up this proposal, originally enacted as part of the 2017 Tax Cuts and Jobs Act,” said Bipartisan Policy Center President Michele Stockwell.
“We the People send Americans into the halls of government with the opportunity to do the Will of the People, to do good. As such, it is perpetually our hope that our elected officials will execute such Will and enact laws that will serve the People, especially in cases where it is feasible in order to ease the burdens that life sometimes thrusts upon us where loved ones, families and businesses are most affected. The PFML Tax Credit Bill provides a judicious antidote for a malaise that has existed for far too long for so many Americans and businesses. More specifically, the PFML Bill effectively eliminates the decision of having to choose between family and a paycheck. In short, it gives individuals, families and employers the relief and peace of mind that they desperately need. On behalf of the American Caregiver Association, I encourage all those who are willing, to support U.S. Senators Deb Fischer and Senator Angus King and their continuing efforts to make the PFML Tax Credit Bill permanent,” said American Caregiver Association President Vincent S. Pettis.
“At SHRM, we are committed to advancing smart, practical policies that strengthen workplaces, empower HR professionals, and maximize human potential. As employers innovate to provide leave options that support well-being and family care, public policy must keep pace—offering incentives that encourage organizations to expand access to leave while maintaining the flexibility needed to design and sustain these programs. A balanced approach ensures that more workers can benefit from this critical support. At SHRM, we prioritize policy over politics and view this effort as a strong example of bipartisan collaboration and constructive policymaking in Congress,” said Society for Human Resource Management Chief of Staff and Head of Government Affairs Emily M. Dickens, J.D.
“On behalf of our nation’s 2.95 million Asian American Pacific Islander (AAPI) business owners and entrepreneurs, National ACE applauds Senators Fischer and King for their leadership in reintroducing the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. Access to paid family and medical leave is vital for small business owners and their employees, particularly within the AAPI community, where caregiving responsibilities often extend across generations. This bipartisan effort provides much-needed support for entrepreneurs striving to balance business success with the well-being of their workforce. We are proud to support this legislation and look forward to working together to ensure small businesses have the resources they need to thrive,” said National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship President and CEO Chiling Tong.
“The Paid Family and Medical Leave Tax Credit Extension and Enhancement Act is essential to help ensure that more small business owners can offer paid family medical leave to their employees. Policies that include support for business owners and working families through programs like paid family leave help address the economic needs of our small businesses and workforce while at the same time making sure small business owners can compete against their larger counterparts. We thank Senators Fischer and King for their bipartisan leadership in introducing this important legislation and applaud the efforts to both expand access to this credit and ensure that the tax credit is permanent,” said National Association of Women Business Owners Board Chair Dr. Janis Shinkawa.
“We are pleased to see the reintroduction of this legislation by Senators Fischer and King and thank them for their leadership on this critical issue. This legislation will encourage employers around the country to offer paid leave to their employees, increasing the number of Americans with paid leave coverage. Paid leave strengthens families and the economy by enabling workers to keep their jobs when they need to care for themselves or a loved one, while helping businesses retain valued employees,” said Sun Life U.S. President Dan Fishbein, M.D.
Full List of National Endorsements:
AARP, Alzheimer’s Impact Movement (AIM), American Council of Life Insurers, American Institute of Certified Public Accountants (AICPA), National Restaurant Association, National Federation of Independent Businesses (NFIB), Bipartisan Policy Center (BPC), American Caregiver Association, Society for Human Resource Management (SHRM), National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship, National Association of Women Business Owners, and Sun Life U.S.
Background:
The Tax Cuts and Jobs Act (TCJA) created a two-year general business tax credit for employers that voluntarily offer up to 12 weeks of PFML to employees. Congress has extended the credit through 2025. The credit also includes an income cap for eligible employees to ensure that it remains targeted to those who need it the most.
Under current law, an employer must meet the following criteria to claim the credit: offer all qualifying employees at least two weeks of PFML, have a written PFML policy in effect, and pay at least 50 percent of an employee’s normal wages while the employee is on PFML. According to the Bureau of Labor Statistics (BLS), only 19 percent of those working for employers with less than 50 employees have access to PFML.
Senators Fischer and King’s legislation builds on the existing credit by making the following changes:
Making the Credit Permanent:
- Provides certainty to businesses taking the leap to offer paid family and medical leave.
Updating the Treatment of Paid Leave Required by State or Local Mandates:
- Allows eligible employers to receive the credit for leave provided in states without PFML mandates or for leave offered in excess of any state or local mandate.
- Currently, employers providing PFML under state or local government mandates are ineligible for the credit, meaning that some employers with operations in both non-mandate and mandate states are ineligible for the credit.
Supporting Coverage of PFL Insurance Premiums:
- Allows employers to claim the credit for premiums paid for PFML insurance products that cover qualifying employees. The structure mirrors the current credit, enabling employers to receive up to a 25 percent credit towards yearly premiums, depending on the percentage of wages the insurance plan replaces.
Reducing the Minimum Employment Period Requirement:
- Provides employers the option to offer PFML to employees at six months and better target the credit towards younger workers.
Requiring Greater Outreach and Awareness:
- Requires the Small Business Administration and Internal Revenue Service to conduct targeted outreach, education, and technical assistance to assist in increasing awareness of the credit.
Click here to read a summary of the bill.
Click here to read the text of the bill.