119-s400

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 400 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 400

 To amend the Internal Revenue Code of 1986 to enhance the paid family 
 and medical leave credit, and for other purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 February 4, 2025

Mrs. Fischer (for herself and Mr. King) introduced the following bill; 
 which was read twice and referred to the Committee on Finance

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 to enhance the paid family 
 and medical leave credit, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Paid Family and Medical Leave Tax 
Credit Extension and Enhancement Act''.

SEC. 2. ENHANCEMENT OF PAID FAMILY AND MEDICAL LEAVE CREDIT.

    (a) In General.--

Section 45S of the Internal Revenue Code of 1986 
is amended--

    (1) in subsection

    (a) --
        (A) by striking paragraph

    (1) and inserting the 
 following:
 ``

    (1) In general.--For purposes of 

section 38, in the case 
 of an eligible employer, the paid family and medical leave 
 credit is an amount equal to either of the following (as 
 elected by such employer):
 ``
        (A) The applicable percentage of the amount of 
 wages paid to qualifying employees with respect to any 
 period in which such employees are on family and 
 medical leave.
 ``
        (B) If such employer has an insurance policy with 
 regards to the provision of paid family and medical 
 leave which is in force during the taxable year, the 
 applicable percentage of the total amount of premiums 
 paid or incurred by such employer during such taxable 
 year with respect to such insurance policy.'', and
        (B) by adding at the end the following:
 ``

    (3) Rate of payment determined without regard to whether 
 leave is taken.--For purposes of determining the applicable 
 percentage with respect to paragraph

    (1)
        (B) , the rate of 
 payment under the insurance policy shall be determined without 
 regard to whether any qualifying employees were on family and 
 medical leave during the taxable year.'',

    (2) in subsection

    (b)

    (1) , by striking ``credit allowed'' 
 and inserting ``wages taken into account'',

    (3) in subsection
            (c) , by striking paragraphs

    (3) and

    (4) and inserting the following:
 ``

    (3) Aggregation rule.--
 ``
        (A) In general.--Except as provided in 
 subparagraph
        (B) , all persons which are treated as a 
 single employer under subsections

    (b) and
            (c) of 
 

section 414 shall be treated as a single employer.
 ``
        (B) Exception.--
 ``
            (i) In general.--Subparagraph
        (A) shall 
 not apply to any person who establishes to the 
 satisfaction of the Secretary that such person 
 has a substantial and legitimate business 
 reason for failing to provide a written policy 
 described in paragraph

    (1) or

    (2) .
 ``
            (ii) Substantial and legitimate business 
 reason.--For purposes of clause
            (i) , the term 
 `substantial and legitimate business reason' 
 shall not include the operation of a separate 
 line of business, the rate of wages or category 
 of jobs for employees (or any similar basis), 
 or the application of State or local laws 
 relating to family and medical leave, but may 
 include the grouping of employees of a common 
 law employer.
 ``

    (4) Treatment of benefits mandated or paid for by state 
 or local governments.--For purposes of this section, any leave 
 which is paid by a State or local government or required by 
 State or local law--
 ``
        (A) except as provided in subparagraph
        (B) , shall 
 be taken into account in determining the amount of paid 
 family and medical leave provided by the employer, and
 ``
        (B) shall not be taken into account in 
 determining the amount of the paid family and medical 
 leave credit under subsection

    (a) .'',

    (4) in subsection
            (d) --
        (A) in paragraph

    (1) , by inserting ``(or, at the 
 election of the employer, for not less than 6 months)'' 
 after ``1 year or more'', and
        (B) in paragraph

    (2) --
            (i) by inserting ``, as determined on an 
 annualized basis (pro-rata for part-time 
 employees),'' after ``compensation'', and
            (ii) by striking the period at the end and 
 inserting ``, and'', and
            (C) by adding at the end the following:
 ``

    (3) is customarily employed for not less than 20 hours 
 per week.'', and

    (5) by striking subsection
            (i) .

    (b) No Double Benefit.--

Section 280C

    (a) of the Internal Revenue 
Code of 1986 is amended--

    (1) by striking ``45S

    (a) '' and inserting ``45S

    (a)

    (1)
        (A) '', 
 and

    (2) by inserting after the first sentence the following: 
 ``No deduction shall be allowed for that portion of the 
 premiums paid or incurred for the taxable year which is equal 
 to that portion of the paid family and medical leave credit 
 which is determined for the taxable year under 

section 45S

    (a)

    (1)
        (B) .''.
            (c) Outreach.--

    (1) SBA and resource partners.--Each district office of the 
 Small Business Administration and each resource partner of the 
 Small Business Administration, including small business 
 development centers described in 

section 21 of the Small 
 Business Act (15 U.S.C. 648), women's business centers 
 described in 

section 29 of such Act (15 U.S.C. 656), each 
 chapter of the Service Corps of Retired Executives described in 
 

section 8

    (b)

    (1)
        (B) of such Act (15 U.S.C. 637

    (b)

    (1)
        (B) ), and 
 Veteran Business Outreach Centers described in 

section 32 of 
 such Act (15 U.S.C. 657b), shall conduct outreach to relevant 
 parties regarding the paid family and medical leave credit 
 under 

section 45S of the Internal Revenue Code of 1986, 
 including through--
        (A) targeted communications, education, training, 
 and technical assistance; and
        (B) the development of a written paid family leave 
 policy, as described in paragraphs

    (1) and

    (2) of 
 

section 45S
            (c) of the Internal Revenue Code of 1986.

    (2) Internal revenue service.--The Secretary of the 
 Treasury (or the Secretary's delegate) shall perform targeted 
 outreach to employers and other relevant entities regarding the 
 availability and requirements of the paid family and medical 
 leave credit under 

section 45S of the Internal Revenue Code of 
 1986, including providing relevant information as part of 
 Internal Revenue Service communications that are regularly 
 issued to entities that provide payroll services, tax 
 professionals, and small businesses.
            (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of enactment of this 
Act.
 <all>