Childcare & Paid Leave Policies About To Pass

Childcare & Paid Leave Policies About To Pass Slashing taxes is generally a popular move for politicians, but the sweeping tax system overhaul making its way through Congress may put that theory to the test.The legislation came two steps closer to reality yesterday, when the House of Representatives passed a bill that would cut taxes for corporations and individuals by $1.5 trillion. The Senate is on track to pass a similar measure, after members of the chambers Finance Committee voted to approve their version of the tax package late Thursday night.How the legislation will ultimately impact working families largely depends on whom you ask. The bills do mora than just slash taxes significantly (although not for everyone). Two last-minute additions mean working families may have mora access to paid leave in 2018, as well as a nice chunk of cash in the form of an increased child tax leistungspunkt.But critics say the two proposals may not put as much money in your pocket as you think. H eres what they could mean for your familyPaid Leave Tax CreditThe Senate versionnow includes a tax creditfor all businesses that offer at least two weeks of paid leave to their employees, a provision championed by Republican Sen. Deb Fischer of Nebraska.Fischer hasintroduced similar legislation in the past, but says the tax reform bill made a perfect home for her proposal, since its a tax credit for businessesone she hopes will help encourage more small businesses to offer paid leave to their employees.A lot of big companies provide paid maternity and paternity leave. Its smaller businesses where its really tough for them to do that, especially family businesses, Fischer explains.Under the proposal, which is a two-year pilot program beginning in 2018, businesses that offer at least two weeks of paid leave at 50 percent of an employees salary would be entitled to a tax credit equal to 12.5 percent of the amount paid to the employee. If they pay over 50 percent, they would receive a b igger tax credit, up to a 25 percent cap. In effect, businesses would receive a tax credit equal to about a quarter of what they pay the employee while on leave.One big caveat Companies could only receive the credit for employees who make less than $72,000 per year.Critics say the tax credit wont help many families who need paid leave, for several reasons. First, Its not covering a significant chunk of the cost, so its hard to imagine that many companies are going to departure offering paid leave as a result of this incentive, says Aparna Mathur, Ph.D., a resident scholar in economic policy studies at the conservative-leaningAmerican Enterprise Institute.Another big concern is that parents who work at a place with fewer than 50 employees arent protected by the Family and Medical Leave Act. That means even if an employer starts providing paid leave, its not going to come with job protection, so that means they are not going to even take the two paid weeks because theyre nervous about not having a job at the end of it, Mathur explains.Vicki Shabo, the vice president for theNational Partnership for Women This tax credit has a very good chance of providing a corporate tax break to those companies without expanding access to workers in other companies, she says.Shabo would like to binnensee Congress pass somethingalong the lines of the FAMILY Act, proposed by Sen. Kirsten Gillibrand (D-N.Y.) and Rep. Rosa DeLauro (D-Conn.), which would provide paid leave directly to employees through a federal payroll deduction, rather than a tax credit to employers.The House version doesnt contain a similar proposal, so its unclear if the tax credit will make it into the final bill. I think my Senate colleagues on the conference committee are going to fight hard to keep it in, Fischer says.Child Tax CreditParents looking to defray the sky-high costs of daycare might have taken hope from the fact that the Trump administration, and notably Ivanka Trump,had reportedly championed a $5 00 billion proposalto help families cover childcare costs.However, that proposal seems to have been shelved in favor of a more modest increase in the child tax credit, which would put money in the pocket ofallfamilies, and not just ones who utilize childcare.The House plan would increase the credit from $1,000 to $1,600 per child. The Senate version would increase it to $2,000.The move is beinghailed as a political win for Ivanka Trump, but experts caution the increased creditwont mean a big tax savings for lower-income families, since it isnt fully refundable. (So families who dont have a tax liability dont receive any money.)According toanalysis by the Center on Budget and Policy Priorities, a mother working full time at a minimum wage job would get at most a $75 dollar increase, says Amy K. Matsui, senior counsel and director of government relations for theNational Womens Law Center. In contrast, because families making half a million dollars are eligible to claim the credit for the first time, you could see a family making $500,000 get the full $2,000 tax benefit. Its just a completely skewed priority. Its not going to help the mom making minimum wage put food on the table or diapers on her kid.The Senate is expected to vote on the bill shortly after Thanksgiving. President Trump has expressed support for the bill and is likely to sign it.--This article originally appeared on WorkingMother.com.