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New Tax Credit for Paid Family and Medical Leave Available to Employers

Posted on in Small Business Taxes

San Jose, CA small business tax credit lawyerThe federal Tax Cuts and Jobs Act of 2017 has brought sweeping changes to many areas of tax law. One change that might have been overlooked by businesses is that employers are now eligible for a tax credit if they offer certain kinds of paid family and medical leave to full and part-time workers. If you act before the end of this year, you may be able to qualify for this tax credit.

Qualifying for Tax Credits

Eligible businesses that enact qualifying paid family leave programs or amend existing ones by the end of this year will be able to claim the employer credit. This tax credit will be available for tax years 2018 and 2019. The credit is retroactive to the beginning of the business’ 2018 tax year for qualifying leave already given.

To qualify for the tax credit, employers must meet the following requirements:

  • At least two weeks of paid family and medical leave must be offered each year to all qualifying full-time workers.
  • The leave benefits must be at least 50 percent of the worker’s normal wages. 

For part-time workers, the duration of the leave available will be prorated. 

To be considered a qualifying employee, the employee must work for the business for at least one year, and his/her earnings for the prior year must be below a certain threshold. For a business claiming a credit for benefits given to a worker in 2018, the employee cannot have earned more than $72,000 in 2017.

Get in Touch with a San Jose, CA Business Tax Attorney

Tax rules change from year to year, and as a business owner, you should stay abreast of such changes so that you can save your business money. A tax attorney who understands your business will be able to advise you on how to take advantage of programs and incentives that could benefit your company. Perhaps most importantly, skilled legal counsel can ensure that you remain compliant with all new tax rules.

At John D. Teter Law Offices, we help businesses large and small in all matters related to taxes, and our decades of experience and understanding of tax laws will ensure that you have the skilled representation you need. We can help you create a tax strategy for your business and represent you in an examination. We have experience working with the IRS, the California Department of Tax and Fee Administration, Board of Equalization, Employment Development Department, and the Franchise Tax Board, including appeal work before all of these federal and state tax authorities.

To set up your appointment with a qualified San Jose business tax credit lawyer, call our firm today at 408-866-1810.

Sources:

https://www.irs.gov/newsroom/section-45s-employer-credit-for-paid-family-and-medical-leave-faqs

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