Spencer Accounting Group, LLC - Tax Planning and Preparation Services - West Allis, Milwaukee, Brookfield, Waukesha, United States and Saudi Arabia
  • Home
  • COVID-19
  • Tax Checklist
  • Pricing
  • Let's Chat
  • Services
    • Business Consultation
    • Tax >
      • Tax Planning and Consulting
      • Tax Preparation
      • IRS Tax Audit and Notice Support
    • Tax Resolutions
  • Blog
  • About Us
  • Rush & Cancellation Policy
  • Home
  • COVID-19
  • Tax Checklist
  • Pricing
  • Let's Chat
  • Services
    • Business Consultation
    • Tax >
      • Tax Planning and Consulting
      • Tax Preparation
      • IRS Tax Audit and Notice Support
    • Tax Resolutions
  • Blog
  • About Us
  • Rush & Cancellation Policy

FREE Tax Tips and Updates

Browse our blog for helpful tax planning and preparation information.

Claiming the New Employer Tax Credit for Family and Medical Leave​

11/19/2018

0 Comments

 
Picture
You compete for employee talent in a variety of ways, including perhaps by implementing a medical and family leave policy.
 
The good news on this front is that your federal government may have given you a tax credit (yes, that lovely dollar-for-dollar offset to your taxes) for what you wanted to do anyway. The Tax Cuts and Jobs Act (TCJA) establishes a new federal income tax credit for employers that provide qualifying paid family and medical leave benefits to their employees.
 
This new tax credit is available for two employer tax years only—those beginning between January 1, 2018, and December 31, 2019. If your business operates on a calendar year for tax purposes, you can put your business in a position today to claim the tax credit for both the 2018 and 2019 tax years. But you will need to hurry.
 
If eligible, you can claim a credit equal to 12.5 percent of wages paid to “qualifying employees” (defined later) who are on family and medical leave, as long as the leave payments are at least 50 percent of the normal wages paid to those employees.
 
You can increase the credit beyond the 12.5 percent. For each 1 percent increase in medical leave payments over the 50 percent threshold, the credit rate increases by 0.25 percent, up to a maximum credit rate of 25 percent. A qualifying employee is one who has been employed by your company for at least one year and whose compensation last year was less than $72,000.
 


For purposes of qualifying for the credit, “family and medical leave” is defined as leave taken by a qualified employee for any of the following reasons:

  • The birth of the employee’s son or daughter, in order to care for the son or daughter.
  • The placement of a son or daughter with the employee for adoption or foster care.
  • A serious health condition of the employee’s spouse, son, daughter, or parent.
  • A serious health condition that makes the employee unable to perform the functions of his or her position.
  • Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a member of the US Armed Forces (including the National Guard and reserves) who is on covered active duty or has been notified of an impending call or an order to covered active duty.
  • A serious injury or illness of a covered service member who is the employee’s spouse, son, daughter, parent, or next of kin.
 
Employer-provided vacation leave, personal leave, or medical or sick leave (other than qualifying leave as defined above) is not considered leave eligible for the credit. Also, leave that is paid by a state or local government or that is required by state or local law does not create leave eligible for the credit. The maximum length of paid family and medical leave taken by a specific employee who can qualify for the credit is 12 weeks per tax year of the employer.
​
0 Comments



Leave a Reply.

    We're Here to Help

    Get advice from our experienced network of financial managers. 
    ​

    Categories

    All
    Adjusted Gross Income Compared To Modified Adjusted Gross Income
    Affordable Care Act
    Business Credit
    Calendar Update
    Charitable Donations: Smart Giving
    Due Dates
    End Of The Month Savings Tips!
    Fun Facts
    Important Changes: Listen Up!
    IRA And Wisconsin 529 College Savings Plan
    IRA Roth Conversion
    IRS
    Phishing Scam Warning
    Six Steps For Making Identity Protection Part Of Your Routine
    Tax Reform

    Tax Plan Video

    Important Disclosures


    Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.

    ​
    To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
    ​
    These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

    GET STARTED

    Author

    Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion.  Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.

    Keana founded this website and decided and created this blog page to offer a space for those seeking knowledge to understand, however not to be confused with advice or planning strategies.

    RSS Feed

    Accounting Services
    Tax Preparation
    Picture
Contact us to Get Started:

Email:     Telephone:

Company
About Us
Career Opportunities
Document Upload
Privacy Policy

Picture
Picture
Picture
Copyright @2013-2020 ALL RIGHTS RESERVED.
Photo used under Creative Commons from verchmarco