Small businesses; parental leave tax credit. (HB33)

Introduced By

Del. Peter Farrell (R-Henrico) with support from co-patron Del. Chris Peace (R-Mechanicsville)


Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law


Small business parental leave tax credit. Creates an income tax credit beginning in taxable year 2017 for a portion of the salary or wages paid by small businesses to full-time employees while on leave for the birth of their child or the placement with them of a child for adoption. The credit equals 65 percent of the first $8,333 in salary and wages paid by the small business to an employee while on parental leave. The bill defines parental leave as leave taken that is separate from any paid vacation, sick, or other paid leave. Eligible small businesses must allow full-time employees to take at least eight workweeks of paid parental leave for (i) the birth of their child or (ii) the placement with them of a child for adoption who has not attained age 19 on the date of placement. The salary or wages paid for each week of parental leave must be at least 60 percent of the employee's weekly salary or wages immediately prior to the employee taking leave. In no case will credit be allowed subsequent to 12 workweeks of parental leave. Eligible small businesses must (i) have been operating for at least two full fiscal years immediately prior to the relevant taxable year, (ii) be at least 51 percent independently owned and controlled by one or more individuals who are U.S. citizens or legal residents, and (iii) have, together with affiliates, fewer than 50 full-time employees for the relevant taxable year. The bill defines full-time employees as employees in a job of indefinite duration that requires a minimum of 35 hours per week for at least 48 weeks during the calendar year or a minimum of 1,680 hours during the calendar year. Small businesses will apply for credit from the Department of Taxation, the administering agency for the credit program. The Department will consider complete applications on a first-come, first-served basis and issue credits accordingly. The Department may issue up to $5.5 million in tax credits each fiscal year. Any unused credit may be carried forward by the small business for seven taxable years following the taxable year for which the credit was issued. The credit expires beginning with taxable year 2022. Read the Bill »


Bill Has Failed


11/20/2015Prefiled and ordered printed; offered 01/13/16 16100198D
11/20/2015Referred to Committee on Finance
01/19/2016Impact statement from TAX (HB33)
02/10/2016Assigned Finance sub: Subcommittee #3
02/12/2016Subcommittee recommends laying on the table
02/17/2016Left in Finance