Tax credit expansion aims to boost employer-paid family leave access
S. 400 — Paid Family and Medical Leave Tax Credit Extension and Enhancement Act · Filed by Deb Fischer (R-NE) · 3 cosponsors · Introduced Feb 4, 2025 · Referred to committee
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What it does
This bill expands a tax credit that reimburses employers for wages paid to employees on family and medical leave, and for insurance premiums covering such leave. It broadens eligibility to include employers offering 6-month leave (not just 1-year), part-time workers (20+ hours/week), and allows employers to claim the credit based on insurance premiums regardless of whether employees actually took leave. It also directs the Small Business Administration and IRS to educate small businesses about the credit.
Why we flagged it
The bill's core mechanism is a tax-credit enhancement—it increases the value and scope of an existing employer incentive for paid leave. The operative provisions are technical amendments to IRC §45S, not a new entitlement or mandate. The bill is functionally a tax expenditure (foregone revenue) designed to subsidize employer-provided leave.
What the text implies
- The credit is elective for employers; workers have no direct claim to leave. An employer may claim the credit but still choose not to offer leave, or may offer leave without claiming the credit, creating a gap between the tax incentive and actual worker access.
- The provision allowing employers to claim the credit based on insurance premiums 'without regard to whether any qualifying employees were on family and medical leave' may incentivize employers to purchase insurance policies that are never used, shifting the subsidy toward insurers rather than workers.
- State and local government-mandated leave is explicitly excluded from the credit calculation, potentially creating a two-tier system where workers in states with strong leave laws receive no federal tax benefit to their employers, while workers in states without mandates may benefit more.
- The aggregation rule exception allows employers to avoid providing leave to certain employee groups if they claim a 'substantial and legitimate business reason,' creating potential for discrimination or unequal treatment within a single employer.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
The bill expands employer incentives to offer paid family and medical leave, which directly benefits workers who gain access to wage replacement during leave. However, the benefit is contingent on employer election and depends on employers choosing to claim the credit and offer leave—it is not a guarantee. The expansion to part-time workers and shorter leave periods (6 months) broadens the population that may benefit.
Who stands to gain
- employers offering paid family and medical leave
- insurance companies providing paid leave policies
- small businesses (via SBA outreach and credit availability)
Named in the bill
Internal Revenue Code §45S, Internal Revenue Code §280C, Small Business Administration, Small Business Development Centers, Women's Business Centers, Service Corps of Retired Executives, Veteran Business Outreach Centers, Department of the Treasury
Where it stands
3 cosponsors: 2 Republicans, 1 Independents.
- Feb 4, 2025 — Introduced · Congress.gov: “Introduced in Senate”
- Feb 4, 2025 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
6 lobbying clients named this bill on 11 disclosure filings across 3 quarters, Jun 2025 to Jun 2026. Those filings disclosed $8,590,000 in lobbying spend. A filing names 26 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 82% of bills with at least one filing.
Deb Fischer, the sponsor, reported $352,755 in PAC receipts in the 2026 cycle.
- Alzheimer's Association — $3,590,000 on 2 filings
- American Hotel & Lodging Association — $1,680,000 on 2 filings
- National Restaurant Association — $1,620,000 on 2 filings
- Principal Financial Group — $910,000 on 2 filings
- Hartford Insurance Group (fka Hartford Financial Services Group) — $640,000 on 2 filings
Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (5,441 characters) on May 19, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Jun 2025 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 20, 2026 · page rendered 2026-10-20.
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