Details of Public Law 116-260, section 119 , Employer Credit for Paid Family and Medical Leave

Eligible employers may claim a general business credit equal to 12.5 percent of the amount of wages paid to qualifying employees during any period in which such employees are on family and medical leave if the rate of payment under the program is 50 percent of the wages normally paid to an employee. The credit is increased by 0.25 percentage points (but not above 25 percent) for each percentage point by which the rate of payment exceeds 50 percent. The maximum amount of family and medical leave that may be taken into account with respect to any employee for any taxable year is 12 weeks.

The provision extends the operation of the employer credit for paid family and medical leave 5 years, making the credit inoperative for wages paid in taxable years beginning after December 31, 2025.