I 
115TH CONGRESS 
1ST SESSION H. R. 3595 
To amend the Internal Revenue Code of 1986 to provide a credit to employers 
who provide paid family and medical leave, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 28, 2017 
Mr. KELLY of Pennsylvania (for himself and Ms. SEWELL of Alabama) intro-
duced the following bill; which was referred to the Committee on Ways 
and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
a credit to employers who provide paid family and med-
ical 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 ‘‘Strong Families Act’’. 
SEC. 2. EMPLOYER CREDIT FOR PAID FAMILY AND MED-
ICAL LEAVE. 
(a) IN GENERAL.— 
(1) ALLOWANCE
OF
CREDIT.—Subpart D of 
part IV of subchapter A of chapter 1 of the Internal 
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Revenue Code of 1986 is amended by adding at the 
end the following new section: 
‘‘SEC. 45S. EMPLOYER CREDIT FOR PAID FAMILY AND MED-
ICAL LEAVE. 
‘‘(a) ESTABLISHMENT OF CREDIT.— 
‘‘(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 the 
applicable percentage of the amount of wages paid 
to qualifying employees during any period in which 
such employees are on family and medical leave. 
‘‘(2) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1), the term ‘applicable percentage’ 
means 12.5 percent increased (but not above 25 per-
cent) by 0.25 percentage points for each percentage 
point by which the rate of payment (as described 
under subsection (c)(1)(B)) exceeds 50 percent. 
‘‘(b) LIMITATION.— 
‘‘(1) IN GENERAL.—The credit allowed under 
subsection (a) with respect to any employee for any 
taxable year shall not exceed an amount equal to the 
product of the normal hourly wage rate of such em-
ployee for each hour (or fraction thereof) of actual 
services performed for the employer and the number 
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of hours (or fraction thereof) for which family and 
medical leave is taken. 
‘‘(2) NON-HOURLY WAGE RATE.—For purposes 
of paragraph (1), in the case of any employee who 
is not paid on an hourly wage rate, the wages of 
such employee shall be prorated to an hourly wage 
rate under regulations established by the Secretary, 
in consultation with the Secretary of Labor. 
‘‘(3) MAXIMUM AMOUNT OF LEAVE SUBJECT TO 
CREDIT.—The amount of family and medical leave 
that may be taken into account with respect to any 
employee under subsection (a) for any taxable year 
shall not exceed 12 weeks. 
‘‘(c) ELIGIBLE EMPLOYER.—For purposes of this 
section— 
‘‘(1) IN
GENERAL.—The term ‘eligible em-
ployer’ means any employer who has in place a pol-
icy that meets the following requirements: 
‘‘(A) The policy provides— 
‘‘(i) in the case of a qualifying em-
ployee who is not a part-time employee (as 
defined in section 4980E(d)(4)(B)), not 
less than 2 weeks of annual paid family 
and medical leave, and 
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‘‘(ii) in the case of a qualifying em-
ployee who is a part-time employee, an 
amount of annual paid family and medical 
leave that is not less than an amount 
which bears the same ratio to the amount 
of annual paid family and medical leave 
that is provided to a qualifying employee 
described in clause (i) as— 
‘‘(I) the number of hours the em-
ployee is expected to work during any 
week, bears to 
‘‘(II) the number of hours an 
equivalent qualifying employee de-
scribed in clause (i) is expected to 
work during the week. 
‘‘(B) The policy requires that the rate of 
payment under the program is not less than 50 
percent of the wages normally paid to such em-
ployee for services performed for the employer. 
‘‘(2) SPECIAL
RULE
FOR
CERTAIN
EMPLOY-
ERS.— 
‘‘(A) IN
GENERAL.—An added employer 
shall not be treated as an eligible employer un-
less such employer provides paid family and 
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medical leave in compliance with a policy which 
ensures that the employer— 
‘‘(i) will not interfere with, restrain, 
or deny the exercise of or the attempt to 
exercise, any right provided under the pol-
icy, and 
‘‘(ii) will not discharge or in any other 
manner discriminate against any individual 
for opposing any practice prohibited by the 
policy. 
‘‘(B) ADDED
EMPLOYER; 
ADDED
EM-
PLOYEE.—For purposes of this paragraph— 
‘‘(i) ADDED
EMPLOYEE.—The term 
‘added employee’ means a qualifying em-
ployee who is not covered by title I of the 
Family and Medical Leave Act of 1993, as 
amended. 
‘‘(ii) ADDED
EMPLOYER.—The term 
‘added employer’ means an eligible em-
ployer (determined without regard to this 
paragraph), whether or not covered by that 
title I, who offers paid family and medical 
leave to added employees. 
‘‘(3) AGGREGATION RULE.—All persons which 
are treated as a single employer under subsections 
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(a) and (b) of section 52 shall be treated as a single 
taxpayer. 
‘‘(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 shall not be taken into account in deter-
mining the amount of paid family and medical leave 
provided by the employer. 
‘‘(5) NO
INFERENCE.—Nothing in this sub-
section shall be construed as subjecting an employer 
to any penalty, liability, or other consequence (other 
than ineligibility for the credit allowed by reason of 
subsection (a) or recapturing the benefit of such 
credit) for failure to comply with the requirements 
of this subsection. 
‘‘(d) QUALIFYING EMPLOYEES.—For purposes of 
this section, the term ‘qualifying employee’ means any em-
ployee (as defined in section 3(e) of the Fair Labor Stand-
ards Act of 1938, as amended) who— 
‘‘(1) has been employed by the employer for 1 
year or more, and 
‘‘(2) for the preceding year, had compensation 
not in excess of an amount equal to 60 percent of 
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the amount applicable for such year under clause (i) 
of section 414(q)(1)(B). 
‘‘(e) FAMILY AND MEDICAL LEAVE.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), for purposes of this section, the term 
‘family and medical leave’ means leave for any one 
or more of the purposes described under subpara-
graph (A), (B), (C), (D), or (E) of paragraph (1), 
or paragraph (3), of section 102(a) of the Family 
and Medical Leave Act of 1993, as amended, wheth-
er the leave is provided under that Act or by a policy 
of the employer. 
‘‘(2) EXCLUSION.—If an employer provides paid 
leave as vacation leave, personal leave, or medical or 
sick leave (other than leave specifically for one or 
more of the purposes referred to in paragraph (1)), 
that paid leave shall not be considered to be family 
and medical leave under paragraph (1). 
‘‘(3) DEFINITIONS.—In this subsection, the 
terms ‘vacation leave’, ‘personal leave’, and ‘medical 
or sick leave’ mean those 3 types of leave, within the 
meaning of section 102(d)(2) of that Act. 
‘‘(f) WAGES.—For purposes of this section, the term 
‘wages’ has the meaning given such term by subsection 
(b) of section 3306 (determined without regard to any dol-
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lar limitation contained in such section). Such term shall 
not include any amount taken into account for purposes 
of determining any other credit allowed under this sub-
part. 
‘‘(g) ELECTION TO HAVE CREDIT NOT APPLY.— 
‘‘(1) IN GENERAL.—A taxpayer may elect to 
have this section not apply for any taxable year. 
‘‘(2) OTHER RULES.—Rules similar to the rules 
of paragraphs (2) and (3) of section 51(j) shall 
apply for purposes of this subsection. 
‘‘(h) TERMINATION.—This section shall not apply to 
wages paid in any taxable year beginning after the date 
which is 5 years after the date of the enactment of the 
Strong Families Act.’’. 
(b) CREDIT PART OF GENERAL BUSINESS CREDIT.— 
Section 38(b) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘plus’’ at the end of paragraph (35), 
by striking the period at the end of paragraph (36) and 
inserting ‘‘, plus’’, and by adding at the end the following 
new paragraph: 
‘‘(37) in the case of an eligible employer (as de-
fined in section 45S(c)), the paid family and medical 
leave credit determined under section 45S(a).’’. 
(c) CREDIT ALLOWED AGAINST AMT.—Subpara-
graph (B) of section 38(c)(4) of the Internal Revenue 
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Code of 1986 is amended by redesignating clauses (vii) 
through (ix) as clauses (vii) through (x), respectively, and 
by inserting after clause (vi) the following new clause: 
‘‘(vii) the credit determined under sec-
tion 45S,’’. 
(d) CONFORMING AMENDMENTS.— 
(1) DENIAL
OF
DOUBLE
BENEFIT.—Section 
280C(a) of the Internal Revenue Code of 1986 is 
amended by inserting ‘‘45S(a),’’ after ‘‘45P(a),’’. 
(2) ELECTION TO HAVE CREDIT NOT APPLY.— 
Section 6501(m) of such Code is amended by insert-
ing ‘‘45S(g),’’ after ‘‘45H(g),’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of 
chapter 1 of such Code is amended by adding at the 
end the following new item: 
‘‘Sec. 45S. Employer credit for paid family and medical leave.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to wages paid in taxable years be-
ginning after the date of the enactment of this Act. 
SEC. 3. GAO STUDY OF IMPACT OF TAX CREDIT TO PRO-
MOTE ACCESS TO PAID FAMILY AND MED-
ICAL LEAVE. 
(a) STUDY.—Not later than 4 years after the date 
of enactment of this Act, the Comptroller General of the 
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United States, in consultation with the Secretary of the 
Treasury and the Secretary of Labor, shall— 
(1) complete a study that— 
(A) examines the effectiveness of the tax 
credit for paid family and medical leave author-
ized under section 45S of the Internal Revenue 
Code of 1986 (as added by this Act) in terms 
of— 
(i) increasing access to paid family 
and medical leave among qualifying em-
ployees; 
(ii) promoting the creation of new 
paid family and medical leave policies 
among eligible employers; 
(iii) increasing the generosity of exist-
ing paid family and medical leave policies 
among eligible employers; and 
(iv) incentivizing employee or em-
ployer behavior that might not otherwise 
have occurred in the absence of the credit; 
(B) provides recommendations for ways to 
modify or enhance the tax credit to further pro-
mote access to paid family and medical leave 
for qualifying employees; 
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(C) provides suggestions of alternative 
policies that Federal and State governments 
could implement to increase access to paid fam-
ily and medical leave, particularly among quali-
fying employees; and 
(2) prepare and submit a report to the Com-
mittee on Finance of the Senate and the Committee 
on Ways and Means of the House of Representatives 
setting forth the conclusions of the study conducted 
under paragraph (1) in such a manner that the rec-
ommendations included in the report can inform fu-
ture legislative action. Such report shall also be 
made publicly available via the website of the Gov-
ernment Accountability Office. 
(b) PROHIBITION.—In carrying out the requirements 
of this section, the Comptroller General of the United 
States may request qualitative and quantitative informa-
tion from employers and employees claiming the credit 
under section 45S of the Internal Revenue Code of 1986, 
but nothing in this section shall be construed as man-
dating additional reporting requirements for such employ-
ers or employees beyond what is already required by law. 
Æ 
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