This Alert was previously issued on February 26, 2025. We have updated this Alert to reflect an additional one-year extension to the transition relief for medical leave benefits paid during 2026, which was issued by the Internal Revenue Service (IRS) on December 19, 2025.
On January 15, 2025, the IRS published Revenue Rule 2025-4 (Rev. Rul. 2025-4), which provides direct guidance addressing the federal taxation and applicable reporting requirements for contributions and benefits paid under a state paid family and medical leave (PFML) program. This guidance is generally effective for state PFML contributions and benefits paid on or after January 1, 2025, subject to a transition period for certain requirements.
This Alert is relevant for employers operating in, or with employees working in, states with mandatory PFML programs. As of the date of this Alert, this includes California, Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia.
