Permanent, improved tax credit for paid family and medical leave 

With the passage of the One Big Beautiful Bill Act (Pub. L. No. 119-21), the federal tax credit for employers providing paid family and medical leave has been made permanent and improved. In addition to removing the credit expiration date, the law removes policy requirements that previously put the credit out of reach for many employers, particularly multistate employers.

Beginning in 2026, more employers providing paid family and medical leave that meets certain requirements can take advantage of a general business tax credit ranging from 12.5% to 25% of wages paid to qualifying employees for up to 12 weeks of family and medical leave per taxable year. First enacted as a two-year pilot program under the Tax Cuts and Jobs Act of 2017 (Pub. L. No. 115-97), the general business tax credit had been extended through 2020 and again through 2025 by earlier appropriations legislation (Pub. L. No. 116-94 and Pub. L. No. 116-260).

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