I 
117TH CONGRESS 
1ST SESSION H. R. 5231 
To amend the Internal Revenue Code of 1986 to modify the employer credit 
for paid family and medical leave, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 10, 2021 
Mr. KELLY of Pennsylvania introduced the following bill; which was referred 
to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to modify 
the employer credit for paid family and medical leave, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Relief for Working 
Families Act’’. 
SEC. 2. MODIFICATIONS TO EMPLOYER CREDIT FOR PAID 
FAMILY AND MEDICAL LEAVE. 
(a) CREDIT MADE PERMANENT AND LIMITED TO 
FIRST 5 YEARS AFTER ESTABLISHMENT OF PLAN.— 
VerDate Sep 11 2014 
22:31 Sep 13, 2021
Jkt 019200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H5231.IH
H5231
kjohnson on DSK79L0C42PROD with BILLS
(1) IN GENERAL.—Section 45S(i) of the Inter-
nal Revenue Code of 1986 is amended to read as fol-
lows: 
(2) PHASE-OUT.—Section 45S of such Code is 
amended by adding at the end the following new 
subsection: 
‘‘(i) CREDIT LIMITED TO FIRST 5 YEARS AFTER ES-
TABLISHMENT OF PLAN.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under this section with respect to any taxpayer after 
the 5-taxable-year period beginning with the taxable 
year which includes the date on which the taxpayer 
first has in place a policy described in subsection 
(c)(1). 
‘‘(2) PHASE-DOWN OF CREDIT.—The credit de-
termined under this section (without regard to this 
subsection) shall be reduced by— 
‘‘(A) in the case of the fourth taxable year 
in the 5-taxable-year period described in para-
graph (1), 25 percent of the amount of such 
credit, and 
‘‘(B) in the case of the fifth taxable year 
in such 5-taxable-year period, 50 percent of the 
amount of such credit. 
VerDate Sep 11 2014 
22:31 Sep 13, 2021
Jkt 019200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H5231.IH
H5231
kjohnson on DSK79L0C42PROD with BILLS
‘‘(3) TRANSITIONAL RULE.—The 5-taxable-year 
period described in paragraph (1) shall not be treat-
ed as beginning before the beginning of the tax-
payer’s first taxable year beginning after December 
31, 2022.’’. 
(b) ENHANCED CREDIT FOR NEW PLANS OF SMALL 
EMPLOYERS.— 
(1) IN GENERAL.—Section 45S of such Code is 
amended by adding at the end the following new 
subsection: 
‘‘(j) ENHANCED CREDIT FOR CERTAIN NEW PLANS 
OF SMALL EMPLOYERS.— 
‘‘(1) IN GENERAL.—In the case of an eligible 
small employer— 
‘‘(A) subsection (a)(2) shall be applied— 
‘‘(i) by substituting ‘25 percent’ for 
‘12.5 percent’, and 
‘‘(ii) by substituting ‘50 percent’ for 
‘25 percent’ (determined without regard to 
the substitution described in clause (i)), 
‘‘(B) the credit determined under sub-
section (a)(1) for any taxable year shall be in-
creased by the applicable percentage (deter-
mined after application of subparagraph (A)) of 
the sum of— 
VerDate Sep 11 2014 
22:31 Sep 13, 2021
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H5231.IH
H5231
kjohnson on DSK79L0C42PROD with BILLS
‘‘(i) so much of the amounts paid dur-
ing such taxable year as administrative ex-
penses of carrying out the policy described 
in subsection (c)(1) (other than any 
amounts paid to establish such policy), in-
cluding payments to third-party adminis-
trators and premiums for short-term dis-
ability 
insurance, 
as 
do 
not 
exceed 
$50,000, plus 
‘‘(ii) in the case of the taxable year 
which includes the date on which the policy 
described in subsection (c)(1) takes effect, 
so much of the amounts paid to establish 
such policy as do not exceed $1,000. 
‘‘(2) ELIGIBLE
SMALL
EMPLOYER.—For pur-
poses of this subsection, the term ‘eligible small em-
ployer’ means, with respect to any taxable year, any 
eligible employer— 
‘‘(A) the gross receipts of which for such 
taxable year do not exceed $25,000,000, 
‘‘(B) which employed on average 50 or 
fewer employees on business days during the 
taxable year, and 
VerDate Sep 11 2014 
22:31 Sep 13, 2021
Jkt 019200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5231.IH
H5231
kjohnson on DSK79L0C42PROD with BILLS
‘‘(C) which did not have a policy described 
in subsection (c)(1) in place at any time prior 
to the date of the enactment of this Act.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to taxable years begin-
ning after the date of the enactment of this Act. 
(c) EMPLOYER REQUIREMENTS FOR RATE OF PAY-
MENT.— 
(1) IN
GENERAL.—Subsection (c) of section 
45S of such Code is amended— 
(A) in paragraph (1)(B), by inserting after 
the first sentence the following: ‘‘For purposes 
of determining the rate of payment under the 
program, any family and medical leave which is 
paid by a State or local government or required 
by State or local law, determined as a percent-
age of the wages normally paid to such em-
ployee for services performed for the employer, 
shall be taken into account.’’; and 
(B) in paragraph (4)— 
(i) by striking ‘‘For purposes of this 
section, any’’ and inserting ‘‘Any’’; and 
(ii) by striking ‘‘amount of paid fam-
ily and medical leave provided by the em-
VerDate Sep 11 2014 
22:31 Sep 13, 2021
Jkt 019200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H5231.IH
H5231
kjohnson on DSK79L0C42PROD with BILLS
ployer’’ and inserting ‘‘wages taken into 
account under subsection (a)’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect as if included in 
section 13403 of Public Law 115–97. 
(d) TECHNICAL CORRECTIONS.— 
(1) IN GENERAL.—Section 45S of such Code is 
amended— 
(A) in subsection (b)(1), by striking ‘‘cred-
it allowed’’ and inserting ‘‘wages taken into ac-
count’’; 
(B) in subsection (c), by striking para-
graph (3) 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 estab-
lishes to the satisfaction of the Secretary 
that such person has a substantial and le-
gitimate business reason for failing to pro-
VerDate Sep 11 2014 
22:31 Sep 13, 2021
Jkt 019200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H5231.IH
H5231
kjohnson on DSK79L0C42PROD with BILLS
vide a written policy described in para-
graph (1) or (2). 
‘‘(ii) SUBSTANTIAL AND LEGITIMATE 
BUSINESS
REASON.—For 
purposes 
of 
clause (i), the term ‘substantial and legiti-
mate business reason’ shall not include the 
operation of a separate line of business, 
the rate of wages or category of jobs for 
employees (or any similar basis), or the ap-
plication of State or local laws relating to 
family and medical leave, but may include 
the grouping of employees of a common 
law employer.’’; and 
(C) in subsection (d)(2), by inserting ‘‘, as 
determined on an annualized basis (pro-rata for 
part-time employees),’’ after ‘‘compensation’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect as if included in 
section 13403 of Public Law 115–97. 
Æ 
VerDate Sep 11 2014 
22:31 Sep 13, 2021
Jkt 019200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6301
E:\BILLS\H5231.IH
H5231
kjohnson on DSK79L0C42PROD with BILLS