Yes. Here is a summary of the IRS guidance for 2025. To summarize this:
- Family Leave Benefits: Amounts paid to employees as family leave benefits are included in the employee's gross income but are not considered wages for federal employment tax purposes.
- Medical Leave Benefits: Amounts paid to employees as medical leave benefits are excluded from the employee's gross income if they are attributable to the employee's contributions. If the benefits are attributable to the employer's contributions, they are included in the employee's gross income and subject to Social Security and Medicare taxes.
This follows the advice I gave in my previous answers although not in the same format as this answer.
It does mention that Mandatory employee contributions to state PFML funds are treated as state income taxes and are deductible if the employee itemizes deductions, subject to the state and local tax (SALT) deduction limitation. Even though Washington does not have a state income tax requirement, these can be still be itemized on the federal return as an itemized deduction subject to the Salt Limitation.
IRS Guidance for 2025 for PFML
Rev. Rul. 2025-4
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