Move over, Dracula! The IRS wants you to make room for tax-related updates, because it’s officially National Work and Family Month.
Parents across the country are spending quality time with their children, helping the little tykes prepare for a night of traipsing across the neighborhood in search of tooth-rotting treats. So it just makes sense that October is when lawmakers want to help you remind clients about family-related tax breaks. (I’m sure the timing has nothing to do with being a few short months away from next filing season. Right?)
The IRS pointed out that the Senate designed National Work and Family Month to “help communicate and celebrate progress towards creating more flexible work environments and helping individuals better balance their work-life commitments” back in 2003. Sixteen years later, the IRS is continuing the tradition.
The IRS has already sent two National Work and Family Month releases. The first spotlighted the Employer Credit for Paid Family and Medical Leave, and this week’s update focused on resources found in Publication 3, Armed Forces’ Tax Guide.
What does the IRS have to say about the Employer Credit for Paid Family and Medical Leave?
To take advantage of the Employer Credit for Paid Family and Medical Leave, the IRS says that employers must have a written paid-leave policy that satisfies these requirements:
It’s also important to note that the credit only applies if the qualifying employees “[earned] $72,000 or less” in the past two tax years. As it stands, the last taxable year for which most eligible employers can claim the Employer Credit for Paid Family and Medical Leave is 2019.
Here’s how the credit is calculated, according to the “Section 45S Employer Credit for Paid Family and Medical Leave FAQs” page: “The amount of wages paid to a qualifying employee while on family and medical leave for up to 12 weeks per taxable year. The minimum percentage is 12.5% and is increased by 0.25% for each percentage point by which the amount paid to a qualifying employee exceeds 50% of the employee’s wages, with a maximum of 25%.”
What does the IRS have to say about “Publication 3, Armed Forces’ Tax Guide?”
“Publication 3, Armed Forces’ Tax Guide” is, predictably, a catchall of myriad tax benefits for military families. This week’s press release included seven common tax breaks:
Check back to see what other advice the IRS has that you can pass on to your clients, and don’t forget to remind them to schedule a consultation visit to your office before filing season ramps up.