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Tax Guidance on Tax Contributions under Paid Family Leave Program

The New York Department of Taxation and Finance recently released guidance regarding the tax treatment of family leave contributions under the state’s new Paid Family Leave Program. Pursuant to the guidance:

  • Benefits paid to employees will be taxable non-wage income that must be included in federal gross income.
  • Taxes will not automatically be withheld from benefits; employees can request voluntary tax withholding.
  • Premiums paid by employees through wage deductions are to be deducted from employees’ after-tax wages.
  • Employers should report employee contributions on IRS Form W-2 using Box 14 — State disability insurance taxes withheld.
  • Benefits should be reported by the State Insurance Fund on Form 1099-G and by all other payers on Form 1099-MISC.

Read the Guidance