II
119THCONGRESS
1
STSESSION S. 400
To amend the Internal Revenue Code of 1986 to enhance the paid family
and medical leave credit, and for other purposes.
IN THE SENATE OF THE UNITED STATES
FEBRUARY4, 2025
Mrs. F
ISCHER(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 enhance
the paid family and medical leave credit, and for other
purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Paid Family and Med-4
ical Leave Tax Credit Extension and Enhancement Act’’. 5
SEC. 2. ENHANCEMENT OF PAID FAMILY AND MEDICAL 6
LEAVE CREDIT. 7
(a) I
NGENERAL.—Section 45S of the Internal Rev-8
enue Code of 1986 is amended— 9
(1) in subsection (a)— 10
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(A) by striking paragraph (1) and insert-1
ing the following: 2
‘‘(1) I
N GENERAL.—For purposes of section 38, 3
in the case of an eligible employer, the paid family 4
and medical leave credit is an amount equal to ei-5
ther of the following (as elected by such employer): 6
‘‘(A) The applicable percentage of the 7
amount of wages paid to qualifying employees 8
with respect to any period in which such em-9
ployees are on family and medical leave. 10
‘‘(B) If such employer has an insurance 11
policy with regards to the provision of paid 12
family and medical leave which is in force dur-13
ing the taxable year, the applicable percentage 14
of the total amount of premiums paid or in-15
curred by such employer during such taxable 16
year with respect to such insurance policy.’’, 17
and 18
(B) by adding at the end the following: 19
‘‘(3) R
ATE OF PAYMENT DETERMINED WITH -20
OUT REGARD TO WHETHER LEAVE IS TAKEN .—For 21
purposes of determining the applicable percentage 22
with respect to paragraph (1)(B), the rate of pay-23
ment under the insurance policy shall be determined 24
without regard to whether any qualifying employees 25
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were on family and medical leave during the taxable 1
year.’’, 2
(2) in subsection (b)(1), by striking ‘‘credit al-3
lowed’’ and inserting ‘‘wages taken into account’’, 4
(3) in subsection (c), by striking paragraphs (3) 5
and (4) and inserting the following: 6
‘‘(3) A
GGREGATION RULE.— 7
‘‘(A) I
N GENERAL.—Except as provided in 8
subparagraph (B), all persons which are treated 9
as a single employer under subsections (b) and 10
(c) of section 414 shall be treated as a single 11
employer. 12
‘‘(B) E
XCEPTION.— 13
‘‘(i) I
N GENERAL.—Subparagraph (A) 14
shall not apply to any person who estab-15
lishes to the satisfaction of the Secretary 16
that such person has a substantial and le-17
gitimate business reason for failing to pro-18
vide a written policy described in para-19
graph (1) or (2). 20
‘‘(ii) S
UBSTANTIAL AND LEGITIMATE 21
BUSINESS REASON .—For purposes of 22
clause (i), the term ‘substantial and legiti-23
mate business reason’ shall not include the 24
operation of a separate line of business, 25
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the rate of wages or category of jobs for 1
employees (or any similar basis), or the ap-2
plication of State or local laws relating to 3
family and medical leave, but may include 4
the grouping of employees of a common 5
law employer. 6
‘‘(4) T
REATMENT OF BENEFITS MANDATED OR 7
PAID FOR BY STATE OR LOCAL GOVERNMENTS .—For 8
purposes of this section, any leave which is paid by 9
a State or local government or required by State or 10
local law— 11
‘‘(A) except as provided in subparagraph 12
(B), shall be taken into account in determining 13
the amount of paid family and medical leave 14
provided by the employer, and 15
‘‘(B) shall not be taken into account in de-16
termining the amount of the paid family and 17
medical leave credit under subsection (a).’’, 18
(4) in subsection (d)— 19
(A) in paragraph (1), by inserting ‘‘(or, at 20
the election of the employer, for not less than 21
6 months)’’ after ‘‘1 year or more’’, and 22
(B) in paragraph (2)— 23
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(i) by inserting ‘‘, as determined on 1
an annualized basis (pro-rata for part-time 2
employees),’’ after ‘‘compensation’’, and 3
(ii) by striking the period at the end 4
and inserting ‘‘, and’’, and 5
(C) by adding at the end the following: 6
‘‘(3) is customarily employed for not less than 7
20 hours per week.’’, and 8
(5) by striking subsection (i). 9
(b) N
ODOUBLEBENEFIT.—Section 280C(a) of the 10
Internal Revenue Code of 1986 is amended— 11
(1) by striking ‘‘45S(a)’’ and inserting 12
‘‘45S(a)(1)(A)’’, and 13
(2) by inserting after the first sentence the fol-14
lowing: ‘‘No deduction shall be allowed for that por-15
tion of the premiums paid or incurred for the tax-16
able year which is equal to that portion of the paid 17
family and medical leave credit which is determined 18
for the taxable year under section 45S(a)(1)(B).’’. 19
(c) O
UTREACH.— 20
(1) SBA
AND RESOURCE PARTNERS .—Each 21
district office of the Small Business Administration 22
and each resource partner of the Small Business Ad-23
ministration, including small business development 24
centers described in section 21 of the Small Busi-25
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ness Act (15 U.S.C. 648), women’s business centers 1
described in section 29 of such Act (15 U.S.C. 656), 2
each chapter of the Service Corps of Retired Execu-3
tives described in section 8(b)(1)(B) of such Act (15 4
U.S.C. 637(b)(1)(B)), and Veteran Business Out-5
reach Centers described in section 32 of such Act 6
(15 U.S.C. 657b), shall conduct outreach to relevant 7
parties regarding the paid family and medical leave 8
credit under section 45S of the Internal Revenue 9
Code of 1986, including through— 10
(A) targeted communications, education, 11
training, and technical assistance; and 12
(B) the development of a written paid fam-13
ily leave policy, as described in paragraphs (1) 14
and (2) of section 45S(c) of the Internal Rev-15
enue Code of 1986. 16
(2) I
NTERNAL REVENUE SERVICE .—The Sec-17
retary of the Treasury (or the Secretary’s delegate) 18
shall perform targeted outreach to employers and 19
other relevant entities regarding the availability and 20
requirements of the paid family and medical leave 21
credit under section 45S of the Internal Revenue 22
Code of 1986, including providing relevant informa-23
tion as part of Internal Revenue Service communica-24
tions that are regularly issued to entities that pro-25
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vide payroll services, tax professionals, and small 1
businesses. 2
(d) E
FFECTIVEDATE.—The amendments made by 3
this section shall apply to taxable years beginning after 4
the date of enactment of this Act. 5
Æ
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