IRS Delays Enforcement of PFML Tax Rules
On December 19, 2025, the Internal Revenue Service (IRS) announced that it extended the grace period for states and employers to report tax information about benefits paid through a state’s paid family and medical leave program. For 2026, states and employers will not have to comply with tax and income reporting obligations related to those benefits. Quick Hits The IRS recently declared it will not enforce tax and reporting requirements for state paid family and medical leave (PFML) benefits in 2026. Thirteen states and Washington, D.C., have enacted state-run paid family and medical leave programs. Under Revenue Ruling 2025-4 , amounts paid to an employee under a state’s PFML program should be included in an employee’s gross income and are wages for federal employment tax purposes. However, for 2025, states and employers did not have to comply with the employment tax and reporting requirements in that revenue ruling. In its latest notice, the IRS stated, “States may ...