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 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.

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: 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.

When Does This Credit Expire?

This credit was extended through 2025 by the CAA.

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, it’s important to know your tax obligations and also gain the right tax support. That’s where Block Advisors comes in…

We’re dedicated to meeting the tax, bookkeeping and payroll needs of the self-employed and small business owners. 

Your team of year-round advisors puts a financial lens on your business, guiding you to better decisions while taking care of financial tasks so you can focus on what you love.

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