This summer, we can expect additional guidance from the IRS on the new employer credit under the Family Medical and Leve Act. Early versions of both the forms and the instructions are expected to be released sometime between July and September.
The new credit is part of the federal tax overhaul, and it is effective for wages paid in tax years 2018 and 2019. In order to claim the credit, an employer must provide at least two weeks of paid family and medical leave a year to qualifying employees at a rate of at least 50% of the employee’s regular pay. A “qualified” employee is one who has been employed by the employer for at least a year and who has an annual income of up to $72,000.
The credit will range from 12.5% to 25% of the cost of paid leave, depending on how much of an employees’ regular earnings are replaced by the Family Medical Leave benefit. While there is a list of FAQs on the IRS website, there are is no information on how to claim the credit yet.