Employers: The Paid Family and Medical Leave Tax Credit is now even more valuable

Sept. 23, 2026 

Employers that provide paid family and medical leave to their employees may be eligible for the Employer Credit for Paid Family and Medical Leave, recently enhanced under the Working Families Tax Cuts  
  
This credit is now permanent. Eligible employers can claim a general business tax credit from 12.5% to 25% of wages paid to qualifying employees for up to 12 weeks of family and medical leave per taxable year.  

Additional enhancements include:  

• Employers can claim the credit for employees with at least six months of service, including part-time employees working 20 hours or more per week. 
• Employers can claim the credit for qualifying insurance premiums paid or wages paid during leave.   
• Leave provided under state or local mandates can count toward eligibility for this federal tax credit, but not toward the credit calculation.