Small Business Services

Do You Qualify for Paid Family & Medical Leave Credit as an Employer?

Qualifying employers can claim a business credit called the Paid Family and Medical Leave Credit. Learn more about the credit and see if you qualify as a business owner…

Who Qualifies for the Paid Family and Medical Leave Credit?

Employers who provided paid family and medical leave to their employees during 2018 or 2019 may be eligible to claim a credit. The Employer Credit for Paid Family and Medical Leave is a business credit based on a percentage of wages paid to qualifying employees for one of the reasons listed below.

What Does the Credit Entail?

The credit is 12.5% to 25% of up to 12 weeks of qualifying wages per year paid in 2018 or 2019.

The types of family and medical leave include:           

  • The birth or adoption of a child
  • Caring for a family member with a serious medical condition
  • A serious health condition that makes the employee unable to do the functions of their position
  • Any qualifying exigency due to an employee’s spouse, child or parent being on covered active duty (or having been notified of an impending call or order to covered active duty) in the Armed Forces
  • To care for a service member who’s the employee’s spouse, child, parent or next of kin.

Other forms of time off, such as vacation and sick leave, don’t qualify for this particular credit.

Note: In 2020 employers may be eligible for one of the employer credits for paid leave because of the COVID-19 (coronavirus) outbreak.

How Can Employers Qualify For This Credit?

To qualify to claim the credit, employers must have a written policy in place that provides for:

  • At least two weeks of paid leave to full-time employees (pro-rated for part-time employees), and
  • The paid leave must be at least 50% of the wages normally paid to the employee.

What IRS Form Do You Use To Claim This Credit?

Use Form 8994Employer Credit for Paid Family and Medical Leave, to claim the credit.

(Extra tip: Here is a full list of tax forms for small businesses.)

Want Help Claiming The Employer Credit for Paid Family and Medical Leave?

As a small business, you should gain the expertise of experienced tax advisors. Learn more about Block Advisors small business services.

Insights Icon

Get Matched Today

Find Your Advisor