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IRS Releases Form for Employer Credit for Paid Family and Medical Leave

BY: APA Staff | 01/24/19

The IRS released the new Form 8994, Employer Credit for Paid Family and Medical Leave, and its instructions, which will be used by employers to claim the credit for paid family and medical leave provided to their employees.

Background

Public Law 115-97, known as the Tax Cuts and Jobs Act (TCJA), created a business credit for employers that provide paid family and medical leave to qualifying employees.

Employers may take a general business tax credit equal to a minimum of 12.5% of wages paid to employees on family and medical leave if the employees are paid at least 50% of their normal wages. The tax credit increases by 0.25% for each percentage point that wage payments exceed 50%. The maximum employer tax credit is 25% of wages paid to employees. The credit is applicable to wages paid for up to 12 weeks of leave. The credit is available for wages paid after December 31, 2017, and until December 31, 2019.

To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!