Maine business owners can now qualify for tax incentive if paid leave is offered

September 12, 2019

For the first time ever, employers offering paid family or medical leave will receive a tax credit of up to 25% on wages paid. The change seems to encourage and reward employers for strong HR policies – and the result could increase employee retention rates nationwide. Whether you’re a business who already offers this benefit or one that might be considering it, its a nice change within the tax law.
 
The 'Paid Family and Medical Leave' provision offers an incentive between 12.5% to 25% to employers for wages paid to an employee while away. The more an employer pays, the higher the tax credit. If the full salary is paid to the employee on qualified leave, the maximum credit is 25%. To qualify:

  • You must have a written policy that provides 2 weeks of annual paid leave for full-time employees and your policy must state employees will be paid at least 50% of their regular salary while they’re away.
  • Qualifying leave includes a serious health condition, birth, adoption, fostering a child, care for a spouse/parent/child with a serious health condition, and certain needs of a spouse, child or parent who is a covered veteran or active military member. (Vacation and personal leave to not qualify for this credit.)
  • The maximum length for this credit is 12 weeks per employee, per year.

This new employer credit is only available for 2018 and 2019 unless extended by Congress. Review your policy now and call us with questions on the new credit.

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