Congress doubles tax breaks for employers offering paid leave—but workers aren't guaranteed to see i
H.R. 1424 — To amend the Internal Revenue Code of 1986 to increase the employer tax credit for paid family and medical leave. · Filed by Ryan Mackenzie (R-PA) · Introduced Feb 18, 2025 · Referred to committee
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What it does
This bill doubles the federal tax credit that employers receive for offering paid family and medical leave to employees, raising it from 12.5% to 25% for the first year and from 25% to 50% thereafter. It also makes this credit permanent instead of letting it expire, effective for tax years starting in 2026.
Why we flagged it
The bill's sole operative mechanism is increasing and making permanent a tax credit for employers who offer paid family and medical leave. It is a targeted tax expenditure—a subsidy delivered through the tax code—not a mandate or direct spending program.
What the text implies
- The credit increase is not conditioned on wage levels, worker eligibility, or leave duration—employers can claim the full credit for minimal or restricted leave policies, potentially allowing tax benefits without proportional worker access.
- Making the credit permanent removes sunset pressure; future Congresses cannot easily recalibrate or sunset the provision without affirmative repeal, locking in the tax expenditure indefinitely.
The full analysis lists 3 implications of this text.
Who stands to gain
employers offering paid family and medical leave; large corporations with existing leave programs