HARTFORD - State Representatives Laura Hoydick (R-120), Noreen Kokoruda (R-101), and Vincent Candelora (R-86) are proposing measures this session of the Connecticut General Assembly that would improve the ability of families to take advantage of the benefits offered by the Family Medical Leave Act (FMLA), by Family Medical Leave Benefit Accounts which allow families to take advantage of a pre-tax savings account when they take time off of work for the birth of a child, and for later dependent child care costs as well as to take care of elderly family members. The proposals also provide tax credits to businesses that offer on-site daycare options for employees, and provide relief to families related to the costs of day care by providing a credit against the personal income tax for day care costs.
“These bills will create greater options to families who need to use the benefits associated with FMLA and for employers who are currently supporting their employees by providing services that aid in child rearing,” said Rep. Hoydick. “There are many companies in our state who rightly recognize that for some employees, on-site daycare is a must. These employers that recognize the value of supporting their employees and their families should be encouraged to continue the practice. These bills also provide financial relief to families who are just starting out with newborns and toddlers or who have family members who will require care and by creating Family Medical Leave Benefit Accounts they can invest by setting aside a portion of their income pre-tax much like a 529 or health savings account program.”
“This is an important discussion that needs to be had. Many legislators are pushing for paid Family Medical Leave benefits and though I do recognize how helpful this would be for Connecticut’s families, we cannot provide this program at the expense of jeopardizing our small businesses,” said Rep. Kokoruda. “This bill provides for an optional, self-funded, pre-tax savings plan for employees. This is an option that works for both employees and our struggling, over-burdened businesses. I look forward to working on this legislation so that it will be feasible for both employees and employers.”
“Small businesses and mom-and-pop shops in Connecticut are already struggling in today’s economy, which makes this conversation that much more important. While providing employees with top-notch health benefit options is certainly a priority, we need to ensure that this is a financially attainable task for our businesses,” said Rep. Candelora. “It is important that we consider the most effective and efficient way to avoid impacting and debilitating our employers. These benefit options should be voluntary and funded by the employee.”
Under current state law, employers must provide sixteen weeks of unpaid leave an employee for the birth of a child and care for a newborn, the placement of a child for adoption or foster care with the employee, care for the employee’s spouse, child, or parent with a serious health condition, or when the employee suffers from a serious health condition making them unable to perform the essential functions of their job.
The legislators noted that though the expenses of operating an on-site child care program are a deductible business expense, a tax credit is almost always better than a deduction because a credit cuts the tax bill dollar-for-dollar while the value of a deduction is tied to a particular tax bracket.
The proposed bills are:
H.B 5122, An Act Concerning Personal Income Tax Deductions for Contributions to Family and Medical Leave Benefit Accounts – This proposed bill will allow employees to contribute portions of their pre-tax income to an employee funded family and medical leave account.
H.B. 5109, An Act Establishing a Tax Credit Program for Employers Who Offer On-Site Child Day Care Options for Employees – This bill encourages employers to offer on-site child day care options for the children of employees by establishing a tax credit program for employers who provide those options.
H.B. 5121, An Act Establishing a Tax Credit for Dependent Child Care Costs – To provide relief to families related to the costs of day care by providing a credit against the personal income tax for day care costs.
The legislature’s Finance, Revenue and Bonding Committee voted to draft all three bills at their February 17th meeting, and will be scheduled for a public hearing in the near future.