To amend the Internal Revenue Code of 1986 to increase the employer tax credit for paid family and medical leave.

Introduced on February 18, 2025 by Ryan Mackenzie

This bill makes the federal tax credit for employers who offer paid family and medical leave larger and permanent. Employers that pay workers during approved family or medical leave could get a bigger tax break. The credit’s starting amount would double, the maximum would double, and the step-up for covering more of a worker’s pay would also double. It also removes the program’s expiration, making it permanent. These changes would start for tax years beginning after December 31, 2025.

Key points:

• Who is affected: Employers that offer paid family and medical leave to their workers.
• What changes: The base credit increases from 12.5% to 25%, the top credit rises from 25% to 50%, and the per-point increase for paying a higher share of wages doubles (making higher-pay plans earn bigger credits). The credit is made permanent by removing its sunset.
• When: Applies to tax years starting after December 31, 2025.