IRS issues guidance for paid family leave tax credit

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The Internal Revenue Service has issued guidance for a new tax credit for employers who offer paid family leave programs. Employers who set up qualifying paid family leave programs or amend existing programs by Dec. 31 will be eligible to claim the employer credit for paid family and medical leave, retroactive to the beginning of the employer’s 2018 tax year, for qualifying leave already provided. The guidance in Notice 2018-71 clarifies how to calculate the credit, which was enacted by the 2017 Tax Cuts and Jobs Act.