HB20-1193: Income Tax Benefits For Family Leave

• Creates "leave savings accounts" allowing individuals to contribute up to $5,000 annually from wages to financial institutions for eligible parental and medical leave expenses, with employers able to contribute any amount.

• Provides employees a state income tax deduction for amounts they and their employers contribute to leave savings accounts, plus any interest or investment income earned in the accounts.

• Establishes a 15% employer tax credit for paying employees 50-100% of regular salary during 8-12 weeks of eligible leave for birth, adoption, foster care, serious health conditions, domestic abuse recovery, or military family exigencies.

• Allows employers a 15% tax credit for contributions to employee leave savings accounts, capped at $3,000 per employee per year, with both credits non-refundable but carryable forward 5 years.

• Effective for tax years beginning January 1, 2021, subject to voter approval if a referendum petition is filed within 90 days of final adjournment.