The U.S. Treasury Department is set to issue new guidance on Wednesday expanding tax incentives for employers that provide paid family and medical leave, in a move the Trump administration hopes will resonate with voters ahead of the midterm elections.
Treasury Secretary Scott Bessent and House Speaker Mike Johnson are expected to announce the policy alongside Arizona Representative Juan Ciscomani, a Republican lawmaker facing a competitive re-election race.
The updated guidance broadens a tax credit first introduced in 2017 under President Donald Trump’s tax reform law. Previously, employers qualified only if they directly paid workers while on leave. Under the new rules, businesses will also be eligible if they purchase insurance policies that cover employees’ paid leave.
To qualify, employers must continue offering at least two weeks of paid family or medical leave worth at least 50% of an employee’s wages.
The expansion was included in Trump’s One Big Beautiful Bill Act, with the administration arguing it encourages businesses to support workers without creating a new federal paid leave mandate.
Bessent said the policy would help ensure workers do not have to choose between caring for loved ones and earning an income, while the White House described it as a major benefit for working families.
The United States remains the only member of the Organisation for Economic Co-operation and Development (OECD) without a nationwide requirement for paid family and medical leave.
The announcement comes as Republicans seek to highlight Trump’s economic agenda before the midterm elections. However, a recent Reuters/Ipsos poll found Democrats holding a slight advantage over Republicans on economic issues and on a generic congressional ballot.
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