26 USC 3132 - Payroll credit for paid family leave

U.S Code last checked for updates: May 18, 2024

§ 3132.

Payroll credit for paid family leave

(a)

In general

(b)

Limitations and refundability

(1)

Wages taken into account

The amount of qualified family leave wages taken into account under subsection (a), plus any increases under subsection (e), with respect to any individual shall not exceed—

(A)

for any day (or portion thereof) for which the individual is paid qualified family leave wages, $200, and

(B)

in the aggregate with respect to all calendar quarters, $12,000.

(2)

Credit limited to certain employment taxes

(3)

Refundability of excess credit

(A)

Credit is refundable

(B)

Advancing credit

(c)

Qualified family leave wages

(1)

In general

(2)

Rules of application

(A)

In general

For purposes of determining whether wages are qualified family leave wages under paragraph (1)—

(i)

section 110(a)(2)(A) of the Family and Medical Leave Act of 1993 shall be applied by inserting “or any reason for leave described in section 5102(a) of the Families First Coronavirus Response Act, or the employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID–19 and such employee has been exposed to COVID–19 or the employee’s employer has requested such test or diagnosis, or the employee is obtaining immunization related to COVID–19 or recovering from any injury, disability, illness, or condition related to such immunization” after “public health emergency”, and

(ii)

section 110(b) of such Act shall be applied—

(I)

without regard to paragraph (1) thereof,

(II)

by striking “after taking leave after such section for 10 days” in paragraph (2)(A) thereof, and

(III)

by substituting “$12,000” for “$10,000” in paragraph (2)(B)(ii) thereof.

(B)

Leave must meet requirements

(d)

Allowance of credit for certain health plan expenses

(1)

In general

(2)

Qualified health plan expenses

(3)

Allocation rules

(e)

Allowance of credit for amounts paid under certain collectively bargained agreements

(1)

In general

The amount of the credit allowed under subsection (a) shall be increased by so much of the sum of—

(A)

so much of the employer’s collectively bargained defined benefit pension plan contributions as are properly allocable to the qualified family leave wages for which such credit is so allowed, plus

(B)

so much of the employer’s collectively bargained apprenticeship program contributions as are properly allocable to the qualified family leave wages for which such credit is so allowed.

(2)

Collectively bargained defined benefit pension plan contributions

For purposes of this subsection—

(A)

In general

(B)

Allocation rules

The amount of collectively bargained defined benefit pension plan contributions allocated to qualified family leave wages for any calendar quarter shall be the product of—

(i)

the pension contribution rate (as defined in section 3131(e)(2)), expressed as an hourly rate, and

(ii)

the number of hours for which qualified family leave wages were provided to employees covered under the collective bargaining agreement described in section 3131(e)(2)(A)(iii) during the calendar quarter.

(3)

Collectively bargained apprenticeship program contributions

For purposes of this section—

(A)

In general

(B)

Allocation rules

For purposes of this section, the amount of collectively bargained apprenticeship program contributions allocated to qualified family leave wages for any calendar quarter shall be the product of—

(i)

the apprenticeship contribution rate (as defined in section 3131(e)(3)), expressed as an hourly rate, and

(ii)

the number of hours for which qualified family leave wages were provided to employees covered under the collective bargaining agreement described in section 3131(e)(3)(A)(iii) during the calendar quarter.

(f)

Definitions and special rules

(1)

Applicable employment taxes

For purposes of this section, the term “applicable employment taxes” means the following:

(A)

The taxes imposed under section 3111(b).

(B)

So much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(b).

(2)

Wages

(3)

Denial of double benefit

(4)

Election to not take certain wages into account

(5)

Certain governmental employers

(6)

Extension of limitation on assessment

Notwithstanding section 6501, the limitation on the time period for the assessment of any amount attributable to a credit claimed under this section shall not expire before the date that is 5 years after the later of—

(A)

the date on which the original return which includes the calendar quarter with respect to which such credit is determined is filed, or

(B)

the date on which such return is treated as filed under section 6501(b)(2).

(7)

Coordination with certain programs

(A)

In general

This section shall not apply to so much of the qualified family leave wages paid by an eligible employer as are taken into account as payroll costs in connection with—

(i)

a covered loan under section 7(a)(37) or 7A of the Small Business Act,

(ii)

a grant under section 324 of the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, or

(iii)

a restaurant revitalization grant under section 5003 of the American Rescue Plan Act of 2021.

(B)

Application where PPP loans not forgiven

The Secretary shall issue guidance providing that payroll costs paid during the covered period shall not fail to be treated as qualified family leave wages under this section by reason of subparagraph (A)(i) to the extent that—

(i)

a covered loan of the taxpayer under section 7(a)(37) of the Small Business Act is not forgiven by reason of a decision under section 7(a)(37)(J) of such Act, or

(ii)

a covered loan of the taxpayer under section 7A of the Small Business Act is not forgiven by reason of a decision under section 7A(g) of such Act.

Terms used in the preceding sentence which are also used in section 7A(g) or 7(a)(37)(J) of the Small Business Act shall, when applied in connection with either such section, have the same meaning as when used in such section, respectively.

(g)

Regulations

The Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including—

(1)

regulations or other guidance to prevent the avoidance of the purposes of the limitations under this section,

(2)

regulations or other guidance to minimize compliance and record-keeping burdens under this section,

(3)

regulations or other guidance providing for waiver of penalties for failure to deposit amounts in anticipation of the allowance of the credit allowed under this section,

(4)

regulations or other guidance for recapturing the benefit of credits determined under this section in cases where there is a subsequent adjustment to the credit determined under subsection (a),

(5)

regulations or other guidance to ensure that the wages taken into account under this section conform with the paid leave required to be provided under the Emergency Family and Medical Leave Expansion Act (including the amendments made by such Act),

(6)

regulations or other guidance to permit the advancement of the credit determined under subsection (a), and

(7)

regulations or other guidance with respect to the allocation, reporting, and substantiation of collectively bargained defined benefit pension plan contributions and collectively bargained apprenticeship program contributions.

(h)

Application of section

(i)

Treatment of deposits

(j)

Non-discrimination requirement

(Added Pub. L. 117–2, title IX, § 9641(a), Mar. 11, 2021, 135 Stat. 166.)

cite as: 26 USC 3132