Paid Family and Medical Leave Tax Credit Extension and Enhancement Act

To amend the Internal Revenue Code of 1986 to enhance the paid family and medical leave credit, and for other purposes. 1. Short title This Act may be cited as the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act 2. Enhancement of paid family and medical leave credit (a) In general Section 45S (1) in subsection (a)— (A) by striking paragraph (1) and inserting the following: (1) In general For purposes of section 38, in the case of an eligible employer, the paid family and medical leave credit is an amount equal to either of the following (as elected by such employer): (A) The applicable percentage of the amount of wages paid to qualifying employees with respect to any period in which such employees are on family and medical leave. (B) If such employer has an insurance policy with regards to the provision of paid family and medical leave which is in force during the taxable year, the applicable percentage of the total amount of premiums paid or incurred by such employer during such taxable year with respect to such insurance policy. , and (B) by adding at the end the following: (3) Rate of payment determined without regard to whether leave is taken For purposes of determining the applicable percentage with respect to paragraph (1)(B), the rate of payment under the insurance policy shall be determined without regard to whether any qualifying employees were on family and medical leave during the taxable year. , (2) in subsection (b)(1), by striking credit allowed wages taken into account (3) in subsection (c), by striking paragraphs (3) and (4) and inserting the following: (3) Aggregation rule (A) In general Except as provided in subparagraph (B), all persons which are treated as a single employer under subsections (b) and (c) of section 414 shall be treated as a single employer. (B) Exception (i) In general Subparagraph (A) shall not apply to any person who establishes to the satisfaction of the Secretary that such person has a substantial and legitimate business reason for failing to provide a written policy described in paragraph (1) or (2). (ii) Substantial and legitimate business reason For purposes of clause (i), the term substantial and legitimate business reason (4) Treatment of benefits mandated or paid for by State or local governments For purposes of this section, any leave which is paid by a State or local government or required by State or local law— (A) except as provided in subparagraph (B), shall be taken into account in determining the amount of paid family and medical leave provided by the employer, and (B) shall not be taken into account in determining the amount of the paid family and medical leave credit under subsection (a). , (4) in subsection (d)— (A) in paragraph (1), by inserting (or, at the election of the employer, for not less than 6 months) 1 year or more (B) in paragraph (2)— (i) by inserting , as determined on an annualized basis (pro-rata for part-time employees), compensation (ii) by striking the period at the end and inserting , and (C) by adding at the end the following: (3) is customarily employed for not less than 20 hours per week. , and (5) by striking subsection (i). (b) No double benefit Section 280C(a) (1) by striking 45S(a) 45S(a)(1)(A) (2) by inserting after the first sentence the following: No deduction shall be allowed for that portion of the premiums paid or incurred for the taxable year which is equal to that portion of the paid family and medical leave credit which is determined for the taxable year under section 45S(a)(1)(B). (c) Outreach (1) SBA and resource partners Each district office of the Small Business Administration and each resource partner of the Small Business Administration, including small business development centers described in section 21 of the Small Business Act ( 15 U.S.C. 648 15 U.S.C. 656 15 U.S.C. 637(b)(1)(B) 15 U.S.C. 657b section 45S (A) targeted communications, education, training, and technical assistance; and (B) the development of a written paid family leave policy, as described in paragraphs (1) and (2) of section 45S(c) (2) Internal Revenue Service The Secretary of the Treasury (or the Secretary's delegate) shall perform targeted outreach to employers and other relevant entities regarding the availability and requirements of the paid family and medical leave credit under section 45S (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act.

Summary: Paid Family and Medical Leave Tax Credit Extension and Enhancement Act This bill modifies the employer tax credit for paid family and medical leave. Specifically, the bill (1) makes such credit permanent, (2) allows the credit in states or localities that either mandate or do not mandate paid family and medical leave, (3) allows employers to claim the credit for a portion of their paid family leave insurance premiums, (4) reduces the minimum employment period eligibility requirement, and (5) requires the Small Business Administration and the Internal Revenue Service to conduct targeted outreach to employers and other relevant parties regarding the availability and requirements of the credit.