115 HR 5231 IH: Relief for Working Families Act
U.S. House of Representatives
2021-09-10
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I
117th CONGRESS
1st Session
H. R. 5231
IN THE HOUSE OF REPRESENTATIVES
September 10, 2021
Mr. Kelly of Pennsylvania introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to modify the employer credit for paid family and medical leave, and for other purposes.
1.

Short title
This Act may be cited as the “Relief for Working Families Act”.
2.

Modifications to employer credit for paid family and medical leave
(a)

Credit made permanent and limited to first 5 years after establishment of plan
(1)

In general
Section 45S(i) of the Internal Revenue Code of 1986 is amended to read as follows:
(2)

Phase-out
Section 45S of such Code is amended by adding at the end the following new subsection:
“(i)

Credit limited to first 5 years after establishment of plan
(1)

In general
No credit shall be allowed under this section with respect to any taxpayer after the 5-taxable-year period beginning with the taxable year which includes the date on which the taxpayer first has in place a policy described in subsection (c)(1).
(2)

Phase-down of credit
The credit determined under this section (without regard to this subsection) shall be reduced by—
(A)
in the case of the fourth taxable year in the 5-taxable-year period described in paragraph (1), 25 percent of the amount of such credit, and
(B)
in the case of the fifth taxable year in such 5-taxable-year period, 50 percent of the amount of such credit.
(3)

Transitional rule
The 5-taxable-year period described in paragraph (1) shall not be treated as beginning before the beginning of the taxpayer’s first taxable year beginning after December 31, 2022.”.
(b)

Enhanced credit for new plans of small employers
(1)

In general
Section 45S of such Code is amended by adding at the end the following new subsection:
“(j)

Enhanced credit for certain new plans of small employers
(1)

In general
In the case of an eligible small employer—
(A)
subsection (a)(2) shall be applied—
(i)
by substituting “25 percent” for “12.5 percent”, and
(ii)
by substituting “50 percent” for “25 percent” (determined without regard to the substitution described in clause (i)),
(B)
the credit determined under subsection (a)(1) for any taxable year shall be increased by the applicable percentage (determined after application of subparagraph (A)) of the sum of—
(i)
so much of the amounts paid during such taxable year as administrative expenses of carrying out the policy described in subsection (c)(1) (other than any amounts paid to establish such policy), including payments to third-party administrators and premiums for short-term disability insurance, as do not exceed $50,000, plus
(ii)
in the case of the taxable year which includes the date on which the policy described in subsection (c)(1) takes effect, so much of the amounts paid to establish such policy as do not exceed $1,000.
(2)

Eligible small employer
For purposes of this subsection, the term “eligible small employer” means, with respect to any taxable year, any eligible employer—
(A)
the gross receipts of which for such taxable year do not exceed $25,000,000,
(B)
which employed on average 50 or fewer employees on business days during the taxable year, and
(C)
which did not have a policy described in subsection (c)(1) in place at any time prior to the date of the enactment of this Act.”.
(2)

Effective date
The amendment made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.
(c)

Employer requirements for rate of payment
(1)

In general
Subsection (c) of section 45S of such Code is amended—
(A)
in paragraph (1)(B), by inserting after the first sentence the following: “For purposes of determining the rate of payment under the program, any family and medical leave which is paid by a State or local government or required by State or local law, determined as a percentage of the wages normally paid to such employee for services performed for the employer, shall be taken into account.”; and
(B)
in paragraph (4)—
(i)
by striking “For purposes of this section, any” and inserting “Any”; and
(ii)
by striking “amount of paid family and medical leave provided by the employer” and inserting “wages taken into account under subsection (a)”.
(2)

Effective date
The amendments made by this subsection shall take effect as if included in section 13403 of Public Law 115–97.
(d)

Technical corrections
(1)

In general
Section 45S of such Code is amended—
(A)
in subsection (b)(1), by striking “credit allowed” and inserting “wages taken into account”;
(B)
in subsection (c), by striking paragraph (3) and inserting the following:
“(3)

Aggregation rule
(A)

In general
Except as provided in subparagraph (B), all persons which are treated as a single employer under subsections (b) and (c) of section 414 shall be treated as a single employer.
(B)

Exception
(i)

In general
Subparagraph (A) shall not apply to any person who establishes to the satisfaction of the Secretary that such person has a substantial and legitimate business reason for failing to provide a written policy described in paragraph (1) or (2).
(ii)

Substantial and legitimate business reason
For purposes of clause (i), the term substantial and legitimate business reason shall not include the operation of a separate line of business, the rate of wages or category of jobs for employees (or any similar basis), or the application of State or local laws relating to family and medical leave, but may include the grouping of employees of a common law employer.”; and
(C)
in subsection (d)(2), by inserting “, as determined on an annualized basis (pro-rata for part-time employees),” after “compensation”.
(2)

Effective date
The amendments made by this subsection shall take effect as if included in section 13403 of Public Law 115–97.