IRS Extends Transition Period for PFML
The Internal Revenue Service (IRS) has 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.
The grace period does not apply to employer “pick-up” contributions, when an employer voluntarily pays an employee’s required PFML contribution. Those amounts still must be considered wages and reported on Form W-2.
California, Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Washington, and Washington, DC, have mandatory paid family and medical leave programs. In some states, the benefit payments have not started yet.
Ogletree Deakins:
IRS Delays Enforcement of PFML Tax Rules
