Make the tax credit for paid family leave permanent, aarp tells congress

AARP is urging Congress to permanently extend a federal tax credit to encourage businesses to offer workers up to 12 weeks of paid time off to care for a loved one, be that a parent, spouse

or child. The IRS’ 45S Employer Credit for Paid Family and Medical Leave (PFML), created through the 2017 Tax Cuts and Jobs Act, is set to expire in 2025. The bipartisan Paid Family and

Medical Leave Credit Extension and Enhancement Act, which was reintroduced into the U.S. House and Senate Feb. 5, would make the credit permanent and more accessible. Under the current law,

employers offering at least two weeks of paid family and medical leave may claim the credit, but only for eligible workers who have been on the job for at least a year. The proposed bill

would lower the requirement to six months. LEARN HOW AARP IS FIGHTING FOR YOU AARP is your fierce defender on the issues that matter to people 50-plus. Read more about how we’re fighting for

you every day in Congress and across the country. The legislation also would require federal agencies to conduct outreach and education to make businesses aware of the tax credit, among

other changes. AARP wrote to federal lawmakers Feb. 6 in support of the bill. The enhancements “will encourage and enable more employers, and especially small businesses, to provide this

important benefit to support America’s hardworking family caregivers,” wrote Bill Sweeney, AARP senior vice president for government affairs. More than 41 percent of employees at businesses

with more than 500 employees have access to PFML, while just 20 percent of workers at businesses with fewer than 99 employees have access to it, according to the U.S. Bureau of Labor

Statistics. For eligible employers, the federal tax credit offsets 12.5 percent to 25 percent of the cost of wages paid to employees on PFML, depending on the generosity of the benefit. The

credit only applies to PFML used by full- or part-time employees who earned no more than $93,000 in 2024. AARP backs PFML to support family caregivers, who provide $600 billion in unpaid

labor each year caring for loved ones, according to AARP’s 2023 Valuing the Invaluable report. More than 60 percent do this while also holding down paid jobs, our letter noted. JOIN OUR

FIGHT FOR CAREGIVERS Sign up to become part of AARP’s online advocacy network and help family caregivers get the support they need. The bill is sponsored by U.S. Reps. Randy Feenstra

(R-Iowa), Stephanie Bice (R-Okla.) and Marie Gluesenkamp Perez (D-Wash.) in the House. “Taking care of your health, newborn, or family when they’re most in need shouldn’t come at the cost of

paying the bills,” Gluesenkamp Perez said in a statement on the bill released Feb. 5. “Strong families mean strong communities and local economies.” A companion bill in the Senate is

sponsored by U.S. Sens. Deb Fischer (R-Neb.) and Angus King (I-Maine). “I’m determined to get this key legislation included in whatever tax package Congress considers this year,” Fischer

said in a statement released Feb. 5. Learn more about how AARP is fighting for family caregivers. For more family caregiving coverage, visit AARP’s Caregiver Resource Center.