Use-It-or-Lose-It Tax Breaks Your Small Business Must Take Advantage of Soon

Some tax breaks have a limited existence. Most of the changes in the Tax Cuts and Jobs Act for individuals are set to run only through 2025. But when it comes to businesses, there are some provisions due to expire much sooner. It’s up to you to take advantage of them while you can. While federal law doesn’t require you to give paid leave to employees, you may qualify for a tax credit if you do so. As long as you have a written policy providing at least two weeks of paid family and medical leave and you pay at least 50% of wages normally paid to an employee, you can take a tax credit. The credit amount ranges from 12.5% to 25% of wages, depending on what you pay. However, the credit only applies in 2018 to employees who earned no more than $72,000 in 2018. This dollar limit could be increased for 2019. The IRS has issued guidance in Q-and-A form on this tax credit. Caution: You can’t take the credit to the extent paid leave is paid by a state or local government or required by state or local law.