PRINTER'S NO. 2532
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2000
Session of
2024
INTRODUCED BY R. MACKENZIE, EMRICK, KAZEEM, M. MACKENZIE AND
MARCELL, JANUARY 31, 2024
REFERRED TO COMMITTEE ON FINANCE, JANUARY 31, 2024
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in tax credit and tax benefit administration,
further providing for definitions; providing for paid family
and medical leave tax credit; and establishing the Family and
Medical Leave Tax Credit Program.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definition of "tax credit" in section 1701-
A.1 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971, is amended by adding a paragraph to read:
Section 1701-A.1. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Tax credit." A tax credit authorized under any of the
following:
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(8.2) Article XVII-M.
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Section 2. The act is amended by adding an article to read:
ARTICLE XVII-M
PAID FAMILY AND MEDICAL LEAVE TAX CREDIT
Section 1701-M. Scope of article.
This article relates to paid family and medical leave tax
credits.
Section 1702-M. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Business firm." An entity authorized to do business in this
Commonwealth and subject to taxes imposed under Article III, IV,
VI, VII, VIII, IX or XV.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Federal family and medical leave tax credit." The tax
credit authorized under 26 U.S.C. § 45S (relating to employer
credit for paid family and medical leave).
Section 1703-M. Family and Medical Leave Tax Credit Program.
(a) Establishment.--The Family and Medical Leave Tax Credit
Program is established to supplement, not supplant, existing
Federal tax incentives for providing paid family and medical
leave to employees.
(b) Information.--To qualify for a tax credit under this
article, a business firm must submit information to the
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department that enables the department to confirm the amount of
the Federal family and medical leave tax credit that the
business firm has received for providing paid family and medical
leave to employees in this Commonwealth.
(c) Application.--The following apply to an application for
a tax credit under this article that is submitted to the
department by a business firm:
(1) The application must account for the wages paid to
employees for which the business firm claimed the Federal
family and medical leave tax credit.
(2) The application must be on a form provided by the
department.
(3) The department shall consult with the United States
Internal Revenue Service as necessary to determine that the
business firm provides paid family and medical leave for
employees.
(4) The department shall review and approve or
disapprove the application.
(d) Notification.--The department shall notify the business
firm that the business firm meets the requirements under this
article for that fiscal year no later than 60 days after the
business firm has submitted the application required under this
section.
Section 1704-M. Availability of tax credits.
(a) Application and receipt.--A business firm may:
(1) Apply to the department for a tax credit in
accordance with section 1705-M.
(2) Receive a tax credit under this article equal to the
amount of the Federal family and medical leave tax credit
received for the most recently completed tax year.
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(b) Limitations.--Tax credits under this section shall be
made available by the department on a first-come, first-served
basis within the limitation established under section 1706-M(a).
Section 1705-M. Grant of tax credits.
(a) Tax credit certificate.--In accordance with section
1706-M(a), the department shall grant a tax credit certificate.
The following apply:
(1) The certificate may be used against a tax liability
owed to the Commonwealth by a business firm that provides
proof of receipt of the Federal family and medical leave tax
credit in the taxable year in which the paid family and
medical leave was granted to an employee in this
Commonwealth.
(2) The business firm may apply the credit against any
tax due under Article III, IV, VI, VII, VIII, IX or XV,
excluding any tax withheld by an employer under Article III.
(b) Limitation.--The tax credit shall not exceed 100% of the
total amount of the Federal family and medical leave tax credit
received by a business firm for granting paid family and medical
leave to an employee in this Commonwealth for the taxable year
in which the paid family and medical leave was granted.
Section 1706-M. Amount of tax credits.
(a) Aggregate amount.--The total aggregate amount of all tax
credits approved under this article shall not exceed
$100,000,000 in a fiscal year.
(b) Tax liability.--A tax credit granted for any one taxable
year may not exceed the tax liability of a business firm.
(c) Use.--A tax credit not used in the taxable year the paid
family and medical leave was granted to an employee in this
Commonwealth may not be carried forward or carried back and is
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not refundable or transferable.
Section 1707-M. Guidelines.
The department, in conjunction with the Department of
Revenue, may establish guidelines as necessary to implement this
article.
Section 1708-M. Reporting.
(a) Tax credit .--The tax credit authorized under this
article shall be considered a "tax credit" for the purposes of
Article XVII-A.1.
(b) Additional information in reports.--In addition to the
information required by section 1707-A.1, each report on the tax
credit authorized under this article shall include:
(1) The number of tax credit applications denied solely
as the result of the limitation under section 1706-M(a).
(2) The aggregate amount of tax credits not granted
solely as the result of the limitation in section 1706-M(a).
(3) The average amount of each tax credit not granted
for the applications denied solely as the result of the
limitation in section 1706-M(a).
Section 3. This act shall take effect in 60 days.
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