Sec. 7003. PAYROLL CREDIT FOR REQUIRED PAID FAMILY LEAVE
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## SEC. 7003 PAYROLL CREDIT FOR REQUIRED PAID FAMILY LEAVE **[**[26 U.S.C. 3111 note](/us/usc/t26/s3111)**]** ###
(a)In General In the case of an employer, there shall be allowed as a credit against the tax imposed by section 3111(a) or 3221(a) of the Internal Revenue Code of 1986 for each calendar quarter an amount equal to 100 percent of the qualified family leave wages paid by such employer with respect to such calendar quarter. ###
(b)Limitations and Refundability ####
(1)Wages taken into account The amount of qualified family leave wages taken into account under subsection
(a)with respect to any individual shall not exceed— #####
(A)for any day (or portion thereof) for which the individual is paid qualified family leave wages, $200, and #####
(B)in the aggregate with respect to all calendar quarters, $10,000. ####
(2)Credit limited to certain employment taxes The credit allowed by subsection
(a)with respect to any calendar quarter shall not exceed the tax imposed by section 3111(a) or 3221(a) of such Code for such calendar quarter (reduced by any credits allowed under subsections
(e)and
(f)of section 3111 of such Code, section 7001 of this Act, and section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, for such quarter) on the wages paid with respect to the employment of all employees of the employer. ####
(3)Refundability of excess credit #####
(A)Credit is refundable If the amount of the credit under subsection
(a)exceeds the limitation of paragraph
(2)for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b) of such Code. ##### (B)6 Advancing credit In anticipation of the credit, including the refundable portion under subparagraph (A), the credit may be advanced, according to forms and instructions provided by the Secretary, up to an amount calculated under subsection (a), subject to the limits under subsection (b), both calculated through the end of the most recent payroll period in the quarter. 6Margin of subparagraph
(B)is so in law. See amendment made by section 3606(b)(1)(B) of division A of Public Law 116–136. ###
(c)Qualified Family Leave Wages For purposes of this section, the term “qualified family leave wages” means wages (as defined in section 3121(a) of such Code7) and compensation (as defined in section 3231(e) of the Internal Revenue Code, determined without regard to the sentence in paragraph
(1)thereof which begins “Such term does not include remuneration” and without regard to section 7005(a) of this Act) paid by an employer— ####
(1)which are required to be paid by reason of the Emergency Family and Medical Leave Expansion Act (including the amendments made by such Act), or ####
(2)both— #####
(A)which would be so required to be paid if section 102(a)(1)(F) of the Family and Medical Leave Act of 1993, as amended by the Emergency Family and Medical Leave Expansion Act, were applied by substituting “March 31, 2021” for “December 31, 2020”, and #####
(B)with respect to which all requirements of the Family and Medical Leave Act of 1993 (other than section 107 thereof, and determined by substituting “To be compliant with section 102(a)(1)(F), an employer may not” for “It shall be unlawful for any employer to” each place it appears in subsection
(a)of section 105 thereof, by substituting “made unlawful in this title or described in this section” for “made unlawful by this title” in paragraph
(2)of such subsection, and by substituting “To be compliant with section 102(a)(1)(F), an employer may not” for “It shall be unlawful for any person to” in subsection
(b)of such section) which relate to such section 102(a)(1)(F), and which would apply if so required, are satisfied. 7Section 288(a)(1)(A) and (b)(1) of division N of Public Law 116–260 provides for amendments by inserting “, determined without regard to paragraphs
(1)through
(22)of section 3121(b) of such Code and section 7005(a) of this Act,” after “as defined in section 3121(a) of the Internal Revenue Code of 1986”. The amendment was not executed because the phrase where the new language is to be inserted does not appear in law. Also, had the amendments been able to be executed it would have resulted in “,)”. ###
(d)Allowance of Credit for Certain Health Plan Expenses ####
(1)In general The amount of the credit allowed under subsection
(a)shall be increased by so much of the employer’s qualified health plan expenses as are properly allocable to the qualified family leave wages for which such credit is so allowed. ####
(2)Qualified health plan expenses For purposes of this subsection, the term “qualified health plan expenses” means amounts paid or incurred by the employer to provide and maintain a group health plan (as defined in section 5000(b)(1) of the Internal Revenue Code of 1986), but only to the extent that such amounts are excluded from the gross income of employees by reason of section 106(a) of such Code. ####
(3)Allocation rules For purposes of this section, qualified health plan expenses shall be allocated to qualified family leave wages in such manner as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among covered employees and pro rata on the basis of periods of coverage (relative to the time periods of leave to which such wages relate). ###
(e)Special Rules ####
(1)Denial of double benefit For purposes of chapter 1 of such Code, the gross income of the employer, for the taxable year which includes the last day of any calendar quarter with respect to which a credit is allowed under this section, shall be increased by the amount of such credit. Any wages taken into account in determining the credit allowed under this section shall not be taken into account for purposes of determining the credit allowed under section 45S of such Code. ####
(2)Election not to have section apply This section shall not apply with respect to any employer for any calendar quarter if such employer elects (at such time and in such manner as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe) not to have this section apply. ####
(3)Certain terms Except as otherwise provided in this section, any term used in this section which is also used in chapter 21 of such Code shall have the same meaning as when used in such chapter. #### (4)8 Certain governmental employers This credit shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing. 8There are two paragraph (4)s’ in law. The second paragraph
(4)was added by section 288(c) of division N of Public Law 116–260. #### (4)8 References to railroad retirement tax Any reference in this section to the tax imposed by section 3221(a) of the Internal Revenue Code of 1986 shall be treated as a reference to so much of such tax as is attributable to the rate in effect under section 3111(a) of such Code. ###
(f)Regulations The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including— ####
(1)regulations or other guidance to prevent the avoidance of the purposes of the limitations under this section, ####
(2)regulations or other guidance to minimize compliance and record-keeping burdens under this section, ####
(3)regulations or other guidance providing for waiver of penalties for failure to deposit amounts in anticipation of the allowance of the credit allowed under this section, ####
(4)regulations or other guidance for recapturing the benefit of credits determined under this section in cases where there is a subsequent adjustment to the credit determined under subsection (a), ####
(5)regulations or other guidance to ensure that the wages taken into account under this section conform with the paid leave required to be provided under the Emergency Family and Medical Leave Expansion Act (including the amendments made by such Act), and ####
(6)regulations or other guidance to permit the advancement of the credit determined under subsection (a). ###
(g)Application of Section This section shall apply only to wages paid with respect to the period beginning on a date selected by the Secretary of the Treasury (or the Secretary’s delegate) which is during the 15-day period beginning on the date of the enactment of this Act, and ending on March 31, 2021. ###
(h)Transfers to Federal Old-Age and Survivors Insurance Trust Fund There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a)) amounts equal to the reduction in revenues to the Treasury by reason of this section (without regard to this subsection). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund or Account had this section not been enacted. ###
(i)Treatment of Deposits The Secretary of the Treasury (or the Secretary's delegate) shall waive any penalty under section 6656 of the Internal Revenue Code of 1986 for any failure to make a deposit of the tax imposed by section 3111(a) or 3221(a) of such Code if the Secretary determines that such failure was due to the anticipation of the credit allowed under this section.
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Sec. 7003
PAYROLL CREDIT FOR REQUIRED PAID FAMILY LEAVE
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