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FMLA paid tax credit: IRS guidance fleshes out the details

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Alice Gilman

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in Centerpiece,FMLA Guidelines,Human Resources

FMLA leave is a benefit most employees find valuable. Paid FMLA leave would be better. Better still: paid FMLA leave for which you can take a tax credit on your Form 1120.

The Tax Cuts and Jobs Act provides for just such a tax credit, for paid leave provided during 2018 and 2019. The IRS has now addressed key issues related to this tax credit. The guidance is effective for tax years beginning after Dec. 31, 2018, and before Jan. 1, 2020. (Notice 2018-71, IRB 2018-41)

Paid leave particulars. Through 2019, you may take the tax credit if you voluntarily provide qualified employees with at least two weeks of FMLA leave and pay them at least half their regular salary. Employees qualify for paid FMLA leave if they’ve worked for you for one year and, for leave provided this year. Part-time employees must be provided with a commensurate amount of leave on a prorated basis. Contrast: Employees qualify for regular, unpaid FMLA l...(register to read more)

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