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Bill Detail: HB20-1193

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Title Income Tax Benefits For Family Leave
Status Introduced In House - Assigned to Finance + Appropriations (01/30/2020)
Bill Subjects
  • Fiscal Policy & Taxes
House Sponsors L. Landgraf (R)
K. Van Winkle (R)
Senate Sponsors
House Committee Finance
Senate Committee
Date Introduced 01/30/2020
Description

The bill creates tax incentives to encourage employers to
voluntarily support paid parental and medical leave programs for their
eligible employees and to encourage eligible employees to save for time
away from work during parental and medical leave.
Specifically, section 2 of the bill establishes leave savings
accounts. A leave savings account is an account with a financial

institution for which the individual uses money to pay for any expense
while he or she is on eligible leave, which includes:
  • The birth of a child of the individual and caring for the
child;
  • The placement of a child with the individual for adoption
or foster care;
  • Caring for a spouse, child, or parent of the individual if the
spouse, child, or parent has a serious health condition;
  • A serious health condition that makes the individual unable
to perform the functions of the position of the individual;
  • Time for an individual to care for himself or herself or to
care for a parent or child after being a victim of domestic
abuse; or
  • Any qualifying exigency, as determined by the United
States secretary of labor, arising out of the fact that a
spouse, child, or parent of the individual is on covered
active duty, or has been notified of an impending call or
order to covered active duty, in the United States armed
forces.
An individual may annually contribute up to $5,000 of wages to a
leave savings account. An employer may make a contribution to the
employee's leave savings account in any amount. The department of
health care policy and financing is required to establish a form for an
individual to report information regarding leave savings accounts, and the
individual must annually file this form with the department of revenue to
be eligible for the tax benefit.
Section 3 allows an employee to claim a state income tax
deduction for amounts they or their employer contribute to a leave
savings account. A taxpayer is also allowed to deduct any interest or other
income earned during the taxable year on the investment of money in
their leave savings account.
Section 4 creates an income tax credit for an employer that pays
an employee for leave that is between 8 and 12 weeks long. The leave
must be for one of the same reasons for which an employee may use
money in a leave savings account as specified above. The amount of the
credit is equal to 15% of the amount paid, so long as the amount paid is
at least 50% of the employee's regular salary for a specified time period.
Section 4 also creates an income tax credit for an employer that
contributes to an employee's leave savings account. The amount of the
credit is equal to 15% of the amount contributed to the account; except
that a credit is not allowed for contributions to a leave savings account
that exceed $3,000 in a single year.
Both credits are not refundable, but they may be carried forward
up to 5 years.
The bill also specifies that for employers, an amount equal to the
amount the taxpayer contributed to an employee's leave savings account
and an amount equal to the amount the taxpayer paid in wages for an
employee while on family leave, to the extent an income tax credit is
claimed, will be added to the taxpayer's federal taxable income.

Committee Reports
with Amendments
None
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Fiscal Notes Fiscal Notes (03/12/2020) (most recent)  
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