Section 45S — Permanent under OBBBA 2025

Unlock the Section 45S Tax Credit Opportunity

Interactive tools to explore, size, and estimate the federal Paid Family & Medical Leave tax credit across all 50 states.

Frequently Asked Questions

Section 45S Tax Credit

What is the Section 45S tax credit?

Section 45S is a federal tax credit for employers who provide paid family and medical leave (PFML) to qualifying employees. Made permanent by the OBBBA in 2025, it provides a credit of 12.5% to 25% of wages or insurance premiums paid for qualifying leave.

Who is eligible for the credit?

Any for-profit employer with a written PFML policy offering at least 2 weeks of paid leave at 50%+ wage replacement. Qualifying employees must have been employed for at least 1 year (or 6 months at employer election) and earned under $96,000 in the prior year.

What are the two credit pathways?

Wage-based: Credit on wages paid during qualifying leave. Premium-based: Credit on insurance premiums paid for qualifying PFML policies — even if no employee takes leave. The premium pathway is new under OBBBA and opens the door for insurance agents.

How much is the credit worth?

The credit ranges from 12.5% (at 50% wage replacement) to 25% (at 100% replacement) of qualifying wages or premiums, for up to 12 weeks per employee per year. A typical 100-employee company can expect $9,000 to $22,500 annually in non-mandate states.

What about states with mandated leave?

In mandate states (CA, NY, NJ, MA, WA, etc.), the credit applies only to benefits provided above the state-required minimum. Employers can still qualify by offering supplemental coverage beyond the mandate.

Is this a one-time credit?

No. Section 45S is a permanent, annual credit. Employers claim it every tax year based on that year's qualifying wages or premiums. It recurs as long as the employer maintains a qualifying leave policy.

How do employers claim the credit?

Employers file IRS Form 8994 (Employer Credit for Paid Family and Medical Leave) and report it through Form 3800 (General Business Credit) as part of their annual federal tax return.

What role does VentoKredit play?

VentoKredit, powered by Amberoon Inc., provides the analytics platform — market maps, savings estimators, and prospect intelligence — to help insurance agents and community banks identify, quantify, and close Section 45S opportunities for employers.

50
States Covered
3,100+
Counties Mapped
$17B+
Estimated Annual Credit Pool
2
Credit Pathways