Providing an exemption from the computation of net income for individual and corporate income taxes of certain wages paid by an employer to an employee while on parental leave, and including applicability provisions

This bill provides an exemption from the computation of net income for individual and corporate income taxes of certain wages paid by an employer to an employee while on parental leave. Under the bill, an employer may exempt from the calculation of net income for individual or corporate income tax, as applicable, percent of wages paid to an employee while the employee is on parental leave, not to exceed weeks of such pay, if the parental leave is for the birth of a child, or for the placement of a child with the employee due to adoption or foster care. The bill excludes from the exemption wages paid during leave that are classified as vacation, personal, medical, or sick. For purposes of the individual income tax, a taxpayer who is a partner of a partnership or a shareholder of a subchapter S corporation may exempt that portion of wages qualified under the bill paid by the partnership or subchapter S corporation based on the taxpayer’s pro rata share of the profits or losses from the partnership or subchapter S corporation. The bill applies to tax years beginning on or after January 1, 2022.