Programs
On Jan. 15, 2025, the Internal Revenue Service (IRS) issued guidance via Revenue Ruling 2025-4 (RR 2025-4) on the federal income and employment tax treatment of contributions and benefits paid in certain situations under a state paid family and medical leave program (SPFML), as well as the related reporting requirements. RR 2025-4 provides guidance to the District of Columbia and states that have mandatory paid family and medical leave programs, and for employees working in and employers operating in those states.
Although the effective date of the guidance is Jan. 1. 2025, it is important to note that RR 2025-4 stated that "calendar year 2025 will be regarded as a transition period for purposes of IRS enforcement and administration of the information reporting requirements…and this period is intended to provide States and employers time to configure their reporting and other systems and to facilitate an orderly transition to compliance" with the rules outlined in RR 2025-4.
Review the details here.
Next Steps
We are currently assessing the impact on our products and services and will communicate how we intend to assist in the near future. We will continue to update you as IRS guidance is made available either on this or other provisions of similar accord.