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Bill

HR 1424

To amend the Internal Revenue Code of 1986 to increase the employer tax credit for paid family and medical leave.

119th Congress Introduced by Ryan Mackenzie

Doubles the federal employer tax credit for paid family and medical leave: 12.5%→25%, 25%→50%, 0.25→0.50 pp; removes subsection (f); effective for tax years after 12/31/2025.

Introduced in House
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WeVote Research Nonpartisan
Bill Summary · HR 1424

Summary of H.R. 1424 (Introduced) — Increase Employer Tax Credit for Paid Family & Medical Leave

Status: Introduced in House; filed May 27, 2025. Sponsor: Rep. Ryan Mackenzie (primary). Last recorded House action (per provided timeline): placed on Local & Consent/Con. Calendars, adopted by the House and reported enrolled on June 1, 2025. Referred to House Committee on Ways and Means.

Purpose

H.R. 1424 amends Section 45S of the Internal Revenue Code to increase the size of the federal employer tax credit for providing qualifying paid family and medical leave. The intent is to strengthen the financial incentive for employers to offer paid leave benefits.

Key provisions

  • Amends Section 45S(a)(2) of the Internal Revenue Code by replacing specified percentage figures as follows:
    • Replace “12.5 percent” with “25 percent”
    • Replace “25 percent” with “50 percent”
    • Replace “0.25 percentage points” with “0.50 percentage points”
    • (In effect, the bill doubles the percentage rates and the incremental percentage-point amount used in the credit calculation.)
  • Strikes subsection (f) of Section 45S (removes that subsection from current law).
  • Effective date: the amendments apply to taxable years beginning after December 31, 2025.

Who is affected

  • Employers that provide qualifying paid family and medical leave under IRC section 45S: they would be eligible for a larger credit against federal taxes for wages paid to employees while on qualifying paid leave.
  • Employees may see broadened employer willingness to offer paid leave if higher credits change employer cost calculus.
  • Federal budget/IRS: increased credit rates could reduce federal revenues (the magnitude would depend on employer uptake); IRS will administer the revised credit and may issue guidance.

Procedural and next steps

  • The bill (per provided legislative actions) moved through local/consent calendars and was adopted in the House and reported enrolled on June 1, 2025. For the changes to become law, the measure would still need to be enacted by the Senate and signed by the President (or reconciled if incorporated into another vehicle).

Considerations

  • The text doubles the credit rates (and the incremental rate used in the statutory formula) and removes subsection (f); stakeholders and analysts will want Treasury/IRS guidance on implementing the new rates and clarification of the effect of removing subsection (f). Budgetary scoring would be required to estimate revenue effects.

Compiled from official sources — confirm details with the bill’s official record.

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