7/14/25 Part 2: Employer-Facing Provisions in the New Tax Act

July 14, 2025

By Jeff Robertson  &  Iris Tilley

Last week, we shared a summary of employee-facing provisions in the new tax act (the “Act”).  However, the Act, also contains a number of employer-facing tax provisions.  We are highlighting a few of those provisions to assist employers in considering updates to their internal policies and making business decisions. 

Tax Provisions Impacting Employers and Their Employees

Family Medical Leave Tax Credit Extended and Expanded

The 2021-2025 Family Medical Leave Tax Credit under IRC § 45S has been revised and its scope has been expanded by the Act.  The Act makes the credit (which was set to expire at the end of 2025) permanent.  Scope expansions include a reduction in the minimum work time eligibility minimum from one year to six months.  In addition, state and local paid leave and insurance policy premiums may now be used to qualify for the credit. 

$20 Bicycle Credit and Moving Expenses Permanently Excluded

In 2018, bicycle commuting expense reimbursements were temporarily eliminated from the definition of a qualified fringe benefit, and tax-free moving expense reimbursements (along with the deduction) were temporarily eliminated in most situations.   The Act makes these temporary exclusions permanent. 

Child Care Credit

Employers operating or considering childcare facilities have an expanded tax benefit relating to such services.  The percentage of childcare services for the credit expands to 40%, allowing for an employer to spend up to $1.25 million on services to claim the full credit amount of $500,000.  Eligible small businesses may be eligible for a credit up to $600,000. 

Pass-Thru Deduction and Qualified Stock Exclusions

The Act makes permanent provisions relating to the 20% pass-through entity deduction (which was scheduled to expire at the end of 2025) and relaxes rules on the transfer of qualified stock.  This change opens up potential planning opportunities relating to Employee Stock Ownership Plans and other stock transfers, including stock-based employee compensation tools.

The Barran Liebman Employee Benefits Group assists employers with retirement and health plans.  Please contact Jeff Robertson at 503-276-2140 or jrobertson@barran.com, Iris Tilley at 503-276-2155 or itilley@barran.com, or your regular attorney at Barran Liebman if you have any questions.