Sometimes, I feel the need to review a topic previously published. This is one of them. So many employers just do not know anything at all about this credit, to their loss.
This credit is for employers who give their employees time off for Family and Medical Leave.
Here are the specifics to be able to take this credit: 1) You must have a written plan that has been distributed to all employees stating the “rules” that you offer (i.e. pay, number of days off per year, types of events, etc.); 2) Your “plan” must offer at least 2 weeks of paid leave annually; 3) Qualified workers must earn less than $72,000 a year; 4) Qualified workers must have been employed by you for at least 1 year; 5) Payment for leave must be at least 50% of regular pay; 6) Credit starts at 12.5% of actual leave paid for 50% of regular pay and goes up to a maximum of 25% credit for 100% of regular pay; 7) Maximum time leave pay qualifies is 12 weeks.
Kinds of events that qualify for the credit on payment of Family and Medical Leave are: 1) Birth of the employee’s child and the care of such child; 2) Placement of a child with the employee for adoption or foster care; 3) Care for the employee’s spouse, child, or parent who has a serious health condition; 4) The employee’s serious health condition that makes them unable to perform the functions of their position (if they are dealing with the debilitating symptoms of COVID, they obviously are unable to perform their job); 5) Any qualifying exigency due to an employee’s spouse, child, or parent being on covered active duty in the Armed Forces.
You should be having your bookkeeper keep track of all the qualified Family and Medical Leave that you paid by employee. (Only what you paid through September 30th 2021.) At the end of the year, tell your tax preparer that amount. (You also must provide your tax preparer with the name and social security number of each qualified employee, as well as what percent of regular pay you do for Family and Medical Leave.)
Hey! If you were already a generous employer, this is found money! If you’ve been on the fence about starting a Family and Medical Leave pay arrangement, maybe this credit is enough to get you started.
Did you hear? Psalms 94:19 says, “When the cares of my heart are many, your consolations cheer my soul.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com Also on Facebook.