Doctor, Doctor, Give Me the Tax Credit…

There is a new credit in town… and if you are an employer or know someone who is… this could affect you.

This new credit benefits employers who provide paid medical and family leave. 

A new employer credit is apart of the tax reform that passed last year. If you are an employer and will pay medical and family leave to your employees during the 2018 and 209 tax years, you may just qualify for a new business tax credit. 

What?

The Medical and Family Leave Act includes several events, so the leave can be for one or any combination of…

  • The birth of your employee’s child
  • Care for the child
  • If your employee adopts a child or is placed with a foster child
  • If your employee’s family member has a serious health condition and needs to care for them
  • If the employee themselves have a serious health condition that renders them unable to work

Who?

You qualify IF you provide at least two weeks of paid medical or family leave to any full-time employers you have, provide pay for leave that is at least half of what the employee would usually receive, and a prorated amount of paid leave for part-time employers. 

When?

This credit is available for wages paid in taxable years beginning after 12/31/2017 and before 01/01/2020. 

How Much?

The credit is generally equal to 12.5% – 25% of paid medical and family leave, if you qualify.

How?

If you are eligible to claim the credit, you need to Attach Form 8994 to your return, and obviously let us #GoldenGirls know. It is good to note that you may be eligible to claim the credit retroactively to the beginning of the next taxable year. Also note that there may be limitations that apply. For instance, for the tax-year 2018, the employee’s 2017 compensations from you as the employer must be $72K or less. 

Questions? Let us know, we are here for you. 

taxes tax humor

 

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