New Employer Tax Credit For Paid Family And Medical Leave Available For 2018 And 2019
Today the IRS announced that eligible employers who provide paid family and medical leave to their employees may qualify for new business credit for tax years 2018 and 2019.
Employer Tax Credit
In addition, eligible employers who set up qualifying paid family leave programs or amend existing programs by Dec. 31, 2018, will be eligible to claim the employer credit for paid family and medical leave, retroactive to the beginning of the employer’s 2018 tax year, for qualifying, leave already provided.
In Notice 2018-71 , posted today on IRS.gov, the IRS provided detailed guidance on the new credit in a question and answer format. The credit was enacted by the 2017 Tax Cuts and Jobs Act (TCJA).
The notice released today clarifies how to calculate the credit including the application of special rules and limitations. Only paid family and medical leave provided to employees whose prior-year compensation was at or below a certain amount qualify for the credit. Generally, for the tax year 2018, the employee’s 2017 compensation from the employer must have been $72,000 or less.
Conclusion
In conclusion, the IRS has announced that eligible employers who offer paid family and medical leave to employees may qualify for a new business credit for tax years 2018 and 2019. Employers can claim this credit retroactively for qualifying leave already provided, provided they meet specific conditions, such as setting up or amending qualifying programs by December 31, 2018. The credit is designed to encourage employers to offer paid leave, with certain income thresholds for employees to qualify. For tax year 2018, employees must have had compensation of $72,000 or less in 2017. The IRS has provided additional guidance on the credit through Notice 2018-71, which outlines how to calculate the credit and apply the relevant rules.
The post New Employer Tax Credit For Paid Family And Medical Leave Available For 2018 And 2019 appeared first on Law Office of Mary E. King P.L. .
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