“We’ll try to cooperate fully with the IRS, because, as citizens, we feel a strong patriotic duty not to go to jail.”
– Dave Berry
An employer can take tax credits based on a percentage of wages that are paid to qualifying employees as part of the Family Medical Leave Act (FMLA). Most companies have written policies regarding FMLA. However, in order to receive the maximum tax credit for qualifying employees, an employer’s policy must comply to the IRS policy:
“An eligible employer’s written policy must provide all qualifying employees with at least two weeks of paid family and medical leave (prorated for part-time employees), at a rate of at least 50 percent of the employee’s normal wages, as these terms are defined and described in more detail in Sections B and C of this notice. In addition, if the employer employs any qualifying employees… who are not covered by title I of the FMLA, the employer’s written policy must include ‘non-interference’ language…” (page 4)
Businesses and their HR departments need to make sure their company FMLA policies not only protect their employees but protect the financial interests of the company. Contact a BenefitCorp consultant to review your policies and make sure you comply with IRS regulations and are able to maximize your tax credits.