On December 19, 2025, the Internal Revenue Service (IRS) issued IRS Notice 2026-6 which extends the transition period provided to state paid family and medical leave programs (PFML) and employers for an additional year. Due to this new guidance, Massachusetts will delay its implementation of certain portions of the tax withholding and reporting requirements outlined in IRS Revenue Ruling 2025-4.
For the calendar year 2026, Massachusetts employers should be aware of the following:
- The Dept. of Family and Medical Leave (DFML) will not treat medical leave benefit payments as “third party sick pay.”
- There will be no new employer withholding or reporting requirements for PFML benefits.
- There will be no changes to employer FICA or FUTA tax responsibility for PFML benefits.
- Employees may continue to elect federal and state income tax withholding on taxable benefits.
- For employers with 25 or more employees, sixty percent (60%) of the medical leave benefits paid to employees will be taxable for federal and state income tax purposes. This is based on employer contribution amounts. DFML will report the taxable amount on Form 1099-G, which will be issued directly to employees.
- Medical leave benefits paid to employees of employers with fewer than 25 employees are not taxable.
- 100% of family leave benefit payments will be taxable for federal and state income tax purposes. DFML will report the taxable amount on Form 1099-G, which will be issued directly to employees.
For more information visit Massachusetts Department of Family and Medical Leave.