Title: Strong Families Act
Policy area: Taxation

Summary:
Strong Families Act
This bill amends the Internal Revenue Code to: (1) allow certain employers a business-related tax credit for a specified percentage (not to exceed 25%) of the amount of wages paid to their employees during any period (not exceeding 12 weeks) in which such employees are on family and medical leave, (2) limit the allowable amount of such credit with respect to any employee to the product of the normal hourly wage rate of such employee for each hour (or fraction thereof) of actual services performed for the employer and the number of hours (or fraction thereof) for which family and medical leave is taken, and (3) terminate such credit five years after the enactment of this bill.
The Government Accountability Office shall complete a study on the effectiveness of the tax credit for paid family and medical leave.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1716 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                S. 1716

   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 SENATE OF THE UNITED STATES

                             August 2, 2017

Mrs. Fischer (for herself and Mr. King) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   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.

    Be it enacted by the Senate and House of Representatives 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 MEDICAL LEAVE.

    (a) In General.--
            (1) Allowance of credit.--Subpart D of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by adding at the end the following new section:

``SEC. 45S. EMPLOYER CREDIT FOR PAID FAMILY AND MEDICAL 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 percent) 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 employee for each hour (or fraction thereof) of 
        actual services performed for the employer and the number 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 employer' means any 
        employer who has in place a policy that meets the following 
        requirements:
                    ``(A) The policy provides--
                            ``(i) in the case of a qualifying employee 
                        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
                            ``(ii) in the case of a qualifying employee 
                        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 
                                employee is expected to work during any 
                                week, bears to
                                    ``(II) the number of hours an 
                                equivalent qualifying employee 
                                described 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 employee for services 
                performed for the employer.
            ``(2) Special rule for certain employers.--
                    ``(A) In general.--An added employer shall not be 
                treated as an eligible employer unless such employer 
                provides paid family and 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 policy, 
                        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 employee.--For purposes 
                of this paragraph--
                            ``(i) Added employee.--The term `added 
                        employee' means a qualifying employee 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 employer 
                        (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 (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 
        determining the amount of paid family and medical leave 
        provided by the employer.
            ``(5) No inference.--Nothing in this subsection 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 employee (as defined in section 3(e) of 
the Fair Labor Standards 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 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 paragraph (2), for 
        purposes of this section, the term `family and medical leave' 
        means leave for any 1 or more of the purposes described under 
        subparagraph (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, whether 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 1 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 dollar 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 subpart.
    ``(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 defined in 
        section 45S(c)), the paid family and medical leave credit 
        determined under section 45S(a).''.
    (c) Credit Allowed Against AMT.--Subparagraph (B) of section 
38(c)(4) of the Internal Revenue 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 section 
                        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 inserting ``45S(g),'' after 
        ``45H(g),''.
            (3) Clerical amendment.--The table of sections 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 beginning after the date of the 
enactment of this Act.

SEC. 3. GAO STUDY OF IMPACT OF TAX CREDIT TO PROMOTE ACCESS TO PAID 
              FAMILY AND MEDICAL LEAVE.

    (a) Study.--Not later than 4 years after the date of enactment of 
this Act, the Comptroller General of the 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 authorized 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 employees;
                            (ii) promoting the creation of new paid 
                        family and medical leave policies among 
                        eligible employers;
                            (iii) increasing the generosity of existing 
                        paid family and medical leave policies among 
                        eligible employers; and
                            (iv) incentivizing employee or employer 
                        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 promote access to 
                paid family and medical leave for qualifying employees; 
                and
                    (C) provides suggestions of alternative policies 
                that Federal and State governments could implement to 
                increase access to paid family and medical leave, 
                particularly among qualifying employees; and
            (2) prepare and submit a report to the Committee 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 
        recommendations included in the report can inform future 
        legislative action. Such report shall also be made publicly 
        available via the website of the Government Accountability 
        Office.
    (b) Prohibition.--In carrying out the requirements of this section, 
the Comptroller General of the United States may request qualitative 
and quantitative information 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 mandating additional 
reporting requirements for such employers or employees beyond what is 
already required by law.
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