Extend Tax Credit for Paid Family Leave, 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.

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.

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We wrote to federal lawmakers last week in support of the bipartisan Paid Family and Medical Leave Credit Extension and Enhancement Act, which would make the credit permanent and also 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. Among other changes, the proposed bill would lower the requirement to six months.

The legislation also would require federal agencies to conduct outreach and education to make businesses aware of the tax credit.

The enhancements “will encourage more employers to provide this important benefit to support working family caregivers,” wrote Bill Sweeney, AARP senior vice president for government affairs, in a July 23 endorsement letter.

AARP strongly backs paid family and medical leave to make it easier for family caregivers, who provide $600 billion in unpaid labor each year, according to AARP’s 2023 Valuing the Invaluable report. More than 60 percent do this while also holding down paid jobs, our letter noted.

The bill is sponsored by U.S. Reps. Randy Feenstra (R-Iowa), Yadira Caraveo (D-Colo.), Stephanie Bice (R-Okla.) and Marie Gluesenkamp Perez (D-Wash.). A companion bill was introduced in the Senate in January by U.S. Sens. Deb Fischer (R-Neb.) and Angus King (I-Maine).

Read our letter and learn more about how AARP is fighting for family caregivers. For more family caregiving coverage, visit AARP’s Caregiver Resource Center.