I 
119TH CONGRESS 
1ST SESSION 
H. R. 996 
To amend the Internal Revenue Code of 1986 to enhance the paid family 
and medical leave credit, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 5, 2025 
Mr. FEENSTRA (for himself, Mrs. BICE, and Ms. PEREZ) 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 enhance 
the paid family and medical leave credit, 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 ‘‘Paid Family and Med-
ical Leave Tax Credit Extension and Enhancement Act’’. 
SEC. 2. ENHANCEMENT OF PAID FAMILY AND MEDICAL 
LEAVE CREDIT. 
(a) IN GENERAL.—Section 45S of the Internal Rev-
enue Code of 1986 is amended— 
(1) in subsection (a)— 
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(A) by striking paragraph (1) and insert-
ing 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 ei-
ther 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 em-
ployees 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 dur-
ing the taxable year, the applicable percentage 
of the total amount of premiums paid or in-
curred 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 WITH-
OUT REGARD TO WHETHER LEAVE IS TAKEN.—For 
purposes of determining the applicable percentage 
with respect to paragraph (1)(B), the rate of pay-
ment under the insurance policy shall be determined 
without regard to whether any qualifying employees 
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were on family and medical leave during the taxable 
year.’’, 
(2) in subsection (b)(1), by striking ‘‘credit al-
lowed’’ and inserting ‘‘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 estab-
lishes to the satisfaction of the Secretary 
that such person has a substantial and le-
gitimate business reason for failing to pro-
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, 
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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. 
‘‘(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 de-
termining 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)’’ after ‘‘1 year or more’’, and 
(B) in paragraph (2)— 
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(i) by inserting ‘‘, as determined on 
an annualized basis (pro-rata for part-time 
employees),’’ after ‘‘compensation’’, and 
(ii) by striking the period at the end 
and inserting ‘‘, and’’, 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) of the 
Internal Revenue Code of 1986 is amended— 
(1) 
by 
striking 
‘‘45S(a)’’ 
and 
inserting 
‘‘45S(a)(1)(A)’’, and 
(2) by inserting after the first sentence the fol-
lowing: ‘‘No deduction shall be allowed for that por-
tion of the premiums paid or incurred for the tax-
able 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 Ad-
ministration, including small business development 
centers described in section 21 of the Small Busi-
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ness Act (15 U.S.C. 648), women’s business centers 
described in section 29 of such Act (15 U.S.C. 656), 
each chapter of the Service Corps of Retired Execu-
tives described in section 8(b)(1)(B) of such Act (15 
U.S.C. 637(b)(1)(B)), and Veteran Business Out-
reach Centers described in section 32 of such Act 
(15 U.S.C. 657b), shall conduct outreach to relevant 
parties regarding the paid family and medical leave 
credit under section 45S of the Internal Revenue 
Code of 1986, including through— 
(A) targeted communications, education, 
training, and technical assistance; and 
(B) the development of a written paid fam-
ily leave policy, as described in paragraphs (1) 
and (2) of section 45S(c) of the Internal Rev-
enue Code of 1986. 
(2) INTERNAL
REVENUE
SERVICE.—The Sec-
retary 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 of the Internal Revenue 
Code of 1986, including providing relevant informa-
tion as part of Internal Revenue Service communica-
tions that are regularly issued to entities that pro-
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vide payroll services, tax professionals, and small 
businesses. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of enactment of this Act. 
Æ 
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