Section 45S Employer Credit for Paid Family and Medical Leave

Federal tax credit for employers who provide qualified paid family and medical leave to employees, including leave to care for a seriously ill spouse, child, or parent. IRS guidance says OBBBA made the credit permanent beginning with tax years after December 31, 2025 and added an insurance-premium path.

Section 45S is an employer-side general business credit for qualified paid family and medical leave. The employer must have a written policy that provides at least two weeks of paid family and medical leave for full-time qualifying employees, prorated for part-time employees, and pays at least 50% of normal wages. Qualifying family and medical leave includes leave to care for the employee's spouse, child, or parent with a serious health condition. IRS OBBBA business-tax guidance says the credit is permanent beginning with tax years after December 31, 2025; beginning in 2026, employers can claim the credit for wages paid during leave or for qualified insurance premiums that provide paid family and medical leave benefits. The credit rate is 12.5% to 25% depending on wage replacement or premium rules. For caregivers, this is not a direct public benefit: it matters when an employer offers a qualifying paid-leave policy.

Eligibility

• Employer must have 1+ employees

Services

Section 45S is an employer-side general business credit for qualified paid family and medical leave. The employer must have a written policy that provides at least two weeks of paid family and medical leave for full-time qualifying employees, prorated for part-time employees, and pays at least 50% of normal wages. Qualifying family and medical leave includes leave to care for the employee's spouse, child, or parent with a serious health condition. IRS OBBBA business-tax guidance says the credit is permanent beginning with tax years after December 31, 2025; beginning in 2026, employers can claim the credit for wages paid during leave or for qualified insurance premiums that provide paid family and medical leave benefits. The credit rate is 12.5% to 25% depending on wage replacement or premium rules. For caregivers, this is not a direct public benefit: it matters when an employer offers a qualifying paid-leave policy.

How to apply

Use the official program page for application details: official program page.