Senator’s Bill Will Make State and Local Governments Eligible for Emergency Paid Leave Payroll Tax Credits

WASHINGTON, D.C. [05/08/20]—This week, U.S. Senator Tina Smith (D-Minn.) introduced a key measure to help state and local governments provide public employees with paid leave when they need it most. Her legislation would provide a tax credit to help state and local governments afford to provide paid leave to police, firefighters, and other employees who can’t work due to coronavirus.   

The Families First Coronavirus Response Act, which was enacted by Congress earlier this year, requires many public and private employers to provide paid leave for workers affected by the coronavirus pandemic. That law provides tax credits to private-sector employers to cover the costs of paid leave. But the package did not extend these tax credits to public-sector employers. This is putting a financial strain on state and local governments at a time when many are grappling with additional costs brought on by the coronavirus pandemic. 

Sen. Smith’s legislation—The Supporting State and Local Leaders Act—will fix this problem by making state, local, and Tribal governments eligible for paid leave payroll tax credits.

“The coronavirus pandemic is stretching employers—including state and local governments—very thin," said Sen. Smith. "State and local governments should be eligible for tax credits to help offset the additional cost of paid leave, just like private companies. Our legislative fix will right this wrong and help support paid leave for police, firefighters and other public employees affected by the pandemic."

Sen. Smith’s legislation is cosponsored by Sens. Dick Durbin (D-Ill.), Amy Klobuchar (D-Minn), Michael Bennet (D-Colo.), Chris Van Hollen (D-Md.) and Tim Kaine (D-Va.).

The Supporting State and Local Leaders Act is supported by the National League of Cities, National Association of Counties, the Association of Public and Land-Grant Universities, National School Boards Association and National Association of Towns and Townships.

You can access bill text here.