New tax law creates, then removes medical leave benefit

Much of Milwaukee’s news coverage over the last few weeks of the year revolved around the Tax Cuts and Jobs Act of 2017. The bill was introduced on Nov. 2 by Rep. Paul Ryan of Wisconsin and others and signed into law on Dec. 22.

The hotly debated law made sweeping changes to corporate and individual taxation. While some aspects of the proposal were widely publicized and discussed, one aspect received little attention: the TCJA created a new tax credit for employers who pay wages for family leave or medical leave. The new credit ranges from 12.5 percent to 25 percent, according to news outlets.

While family and medical leave advocates were pleased by the inclusion of the tax credit, they were undoubtedly disappointed to learn that it lasts but two years. It will disappear after 2019, CPA Practice Advisor reported.

As you know, the FMLA enables employees to take unpaid, job-protected leave for family and medical reasons. Eligible workers can take up to 12 workweeks in a 12-month period for things such as the following:

  • The birth of a child
  • To care for a newborn within a year of his or her birth
  • To care for a spouse, child or parent with a serious health condition
  • If the employee has a serious health condition that prevents him or her from performing the essential functions of their job

Some employers go beyond what is required by FMLA and offer their employees paid leave for certain medical conditions or family reasons. Those employers will now get the short-lived TCJA tax credit.

If you have been denied leave under FMLA or the Wisconsin Family and Medical Leave Act, you can speak with an employment law attorney dedicated to protecting worker rights and careers. Contact Alan C. Olson & Associates, s.c. to learn more about your legal options.



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