IRS Provides Guidance for States that Require Paid Family and Medical Leave Programs

On January 16, 2025, the IRS released Revenue Ruling 2025-4 which provides guidance on the employment tax treatment of contributions and benefits paid under state paid family and medical leave (PFML) programs. Currently, 14 states and D.C. have mandatory PFML programs. This ruling is effective for payments made on or after January 1, 2025, but there is important transition relief for 2025, discussed below. Note: This ruling only discusses contributions and benefits of state-run programs and does not discuss the Federal tax treatment of employers’ or employees’ contributions to private or self-insurance family or medical leave plans or the amounts received by… Read More