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Form 8994: Employer Credit for Paid Family and Medical Leave
IRS Form 8994 is used to calculate the employer credit for paid family and medical leave; it ranges from 12.5% to 25% of wages.
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IRS Form 8994 - Employer Credit for Paid Family and Medical Leave
IRS Form 8994 is used to calculate the employer credit for paid family and medical leave; it ranges from 12.5% to 25% of wages.
Risk Radar
Scan points- 1If you are not a partnership/S corp but use Form 8994, ensure you report the credit directly on Form 3800, line 4j.
- 2Filing without reducing salaries and wages by the amount on Line 1 (if using the worksheet).
- 3Not reporting credits from a K-1 onto Line 2 when required.
- 4Failing to report the total credit amount on Form 3800, Part III, line 4j if not a partnership/S corp.
- 5Using the wrong revision of Form 8994 for tax years beginning in 2020 or later.
Plain English
This form helps an eligible employer determine how much tax credit they can claim because they paid their employees while they were on approved family or medical leave. The resulting credit is a percentage of the wages those qualifying employees earned during that time. Employers use this form to calculate and report this specific benefit credit.
Submission Date
- Filing date: 2024-12-19 22:10:53
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when an eligible employer wants to calculate the employer credit for paid family and medical leave, which ranges from 12.5% to 25% of certain wages paid to a qualifying employee.
- Do not use Form 8994 if your only source for the credit is a partnership or S corporation; these entities must file this form to claim the credit.
- Check Form 3800 instead when you are a taxpayer (and not a partnership/S corp) whose only source for the employer credit is a partnership or S corporation.
Form selector
Use this form or another form?
Employer is an eligible entity, but the policy rate of payment is less than 50%
The credit calculation relies on wages paid under your written policy that independently satisfies the minimum 50% wage requirement.
✓ Check Box B on Form 8994.
Filer is a partnership or S corporation and needs to claim the employer credit for paid family and medical leave
Partnerships and S corporations must file this form specifically to claim the credit.
✓ Ensure Part III of Form 3800 references this filing.
Filer is not an eligible employer because they lack a written policy providing at least 2 weeks of paid family and medical leave
If you answer 'No' to Question A, you must stop and do not file Form 8994.
✓ Verify the existence of your internal written policy.
Deadline or filing window
The employer can claim or elect not to claim this credit up to 3 years from the due date of their return. The form must be filed within this window whether it is for the original tax return or an amended return. No specific extension date is stated in the official source, but the filing window remains open for three years.
Checklist
What you need before filling it out
Form Purpose
Employer credit for paid family and medical leave · Instructions p.1
Credit Range
12.5% to 25% of certain wages · Instructions p.1
Filer Requirement (Partnership/S Corp)
Must file Form 8994 to claim the credit · Instructions p.1
Minimum Paid Leave Rate
At least 50% of wages normally paid to an employee · Instructions p.4 & Form p.1, Box B
Policy Duration Check
Must provide at least 2 weeks of annual paid family and medical leave · Form p.1, Question A
Non-interference Language
Required if employer employs qualifying employees not covered by FMLA title I · Instructions p.1
Before you submit
- 1Confirm you have a written policy providing at least 2 weeks of annual paid family and medical leave (Question A)
- 2Confirm your written policy provides paid family and medical leave of at least 50% of the wages normally paid to a qualifying employee (Question B)
- 3If filing for a partnership or S corporation, ensure you are completing Form 8994
- 4If filing as another taxpayer, confirm that this form is your only source for the credit before proceeding
- 5Verify that your employer independently satisfies the minimum paid leave requirements (Instructions p.4)
- 6Confirm that any wages used to figure the credit were paid under your written policy (Instructions p.4)
- 7Ensure you have completed all required fields on Form 8994 before attaching it to your tax return.
How to file this form
- 1Determine if an eligible employer has a written policy providing at least 2 weeks of annual paid family and medical leave (Question A)
- 2Answer Question B by confirming the written policy provides paid family and medical leave of at least 50% of wages normally paid to a qualifying employee
- 3Complete Part III of Form 8994 with your identifying number and name(s) shown on the return
- 4Attach the completed Form 8994 to your tax return, ensuring you use the January 2021 revision for tax years beginning in 2020 or later
- 5File the form within 3 years from the due date of your original or amended return
Known limitations
- 1All other taxpayers must not complete or file Form 8994 if their sole source for the employer credit is a partnership or S corporation; instead, they must report this credit directly on line 4j in Part III of Form 3800.
- 2If an employer's policy provides different rates of payment or periods of paid family and medical leave for various FMLA purposes, the minimum paid leave requirements must be satisfied with respect to each specific FMLA purpose.
- 3If an employer’s policy provides a uniform rate/period for all qualifying employees and all FMLA purposes (or several specified ones), the entire policy must satisfy the minimum paid leave requirements, not just separately for each FMLA purpose.
Field map
Compact field-by-field guide
Entity Info
1 items
Name and taxpayer ID of the entity claiming the credit.
Credit Info
1 items
Type of credit or incentive being claimed.
Calculation
2 items
The base amount used to calculate the credit.
Calculated credit amount after applying formulas and limitations.
Certification
1 items
Detailed breakdown supporting the credit calculation.
Signatures
1 items
Sign and date the form.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current instructions are from December 2024, and users should use the January 2021 revision of Form 8994 for tax years beginning in 2020 or later. The source directs users to IRS.gov/Form8994 for the latest information regarding developments.
What changed or needs a fresh check
- Edition date — confirm instructions read December 2024
- Form revision date — confirm Form 8994 reads January 2021 (for tax years beginning in 2020 or later)
- Mailing address — Not stated in the official source
- Signature — Check if you have signed the form before sending
Quick Facts
Downloads
After you file
- 1Keep a copy of Form 8994.
- 2The credit can be claimed or elected not to claim any time within 3 years from the due date of your return (on either the original or an amended return).
- 3Partnerships and S corporations must file this form to claim the employer credit for paid family and medical leave.
- 4If you capitalized costs when figuring the credit, reduce the amount capitalized by the credit attributable to those specific costs.
Sources
- SRCInstructions p.1 — The credit ranges from 12.5% to 25% of certain wages paid to a qualifying employee while the employee is on family and medical leave.
- SRCInstructions p.1 — Partnerships and S corporations must file Form 8994 to claim the employer credit for paid family and medical leave.
- SRCInstructions p.1 — All other taxpayers must not complete or file this form if their only source for this credit is a partnership or S corporation; instead, they report it on line 4j in Part III of Form 3800.
- SRCInstructions p.7 — Partnerships and S corporations report credits from Schedule K-1 (Form 1065), box 15 (code BB) or Schedule K-1 (Form 1120-S), box 13 (code BB) on line 2 of Form 8994.
- SRCInstructions p.7 — All other filers figuring a separate credit on line 1 also report the credits from the schedules above on line 2.
- SRCInstructions p.5 — The term 'wages' has the same meaning given to that term by section 3306(b) (regarding FUTA wages), determined without regard to the $7,000 FUTA wage limitation.
- SRCForm p.1 — A written policy must provide for at least 2 weeks of annual paid family and medical leave for qualifying employees (prorated for part-time).
- SRCInstructions p.4 — If a policy has different rates/periods for different FMLA purposes, the minimum requirements must be satisfied with respect to each FMLA purpose.
Common confusion points
Who needs to file Form 8994?
An eligible employer must use Form 8994 to calculate the employer credit for paid family and medical leave.
→ Confirm your organization is an 'eligible employer' first.
What if my company has different pay rates for different types of FMLA leave?
The minimum paid leave requirements must be met separately for every specific FMLA purpose listed in the policy.
→ Check instructions to see how each distinct FMLA purpose (e.g., birth vs. medical) is treated.
Do I need to file Form 8994 if I am a sole proprietor/individual?
All taxpayers, unless they are a partnership or S corporation whose credit comes from those entities, must complete and file the form.
→ Verify that your only source for this credit isn't already reported on another entity's K-1.
What wage definition applies to this credit?
The term 'wages' uses the same meaning as defined in section 3306(b) (regarding FUTA wages), calculated without regard to the $7,000 FUTA wage limitation.
→ Look at Section 3306(b) for the precise definition used by the IRS.
What if I capitalized costs?
If you capitalized any costs when figuring the credit amount, reduce that total capitalized amount by the portion of the credit attributable to those costs.
→ Ensure this reduction is made before finalizing your reported credit on Form 8994.
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Questions about IRS Form 8994
What is IRS Form 8994 used for?
This form helps an eligible employer determine how much tax credit they can claim because they paid their employees while they were on approved family or medical leave. The resulting credit is a percentage of the wages those qualifying employees earned during that time. Employers use this form to calculate and report this specific benefit credit.
Who must file IRS Form 8994?
An eligible employer must file IRS Form 8994 (Rev. December 2024) to figure the employer credit for paid family and medical leave. Partnerships and S corporations must file this form to claim the credit.
What information does IRS Form 8994 require?
The form collects information on Line 1, which details the total paid family and medical leave credit figured for wages paid during the tax year. It also collects data on Line 2, which enters any prior credits from Schedule K-1 (Form 1065) or Schedule K-1 (Form 1120-S).
When is IRS Form 8994 due?
The employer can claim or elect not to claim the credit any time within 3 years from the due date of their return, whether it is the original return or an amended return.
Where do I file IRS Form 8994?
The instructions do not specify a service center for mailing IRS Form 8994 (Rev. December 2024). The form must be filed to claim the credit on line 3, which is then reported on Schedule K or Form 3800, Part III.
How do I complete IRS Form 8994?
First, an employer uses the Paid Family and Medical Leave Credit Worksheet to determine the total credit amount for Line 1. Next, they enter any prior credits received from a partner's or shareholder's K-1 onto Line 2. Finally, the filer adds lines 1 and 2 together on line 3 before reporting that final amount.
What happens if IRS Form 8994 is filed incorrectly?
If an employer does not file Form 8994 when required, they may fail to properly report their paid family and medical leave credits. If filing for a partnership or S corporation, failure to use the appropriate lines can cause issues with reporting on Schedule K or Form 3800.
Who needs to file Form 8994?
An eligible employer must use Form 8994 to calculate the employer credit for paid family and medical leave. Confirm your organization is an 'eligible employer' first.
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