PFML Revenue Ruling

[ericheik]

Based on the new IRS PFML guidance issued in Revenue Ruling 2025-4, my wife and I are eligible to exclude some of our Massachusetts PFML Medical Leave benefits found on MA 1099-G from our taxable income, based on the percentage of employee contributions. 

Since this is a brand new change, how can we go about reporting this on our 2024 return?

Should we report the net taxable PFML benefit amount on Schedule 1, line 7 without any justification? Or perhaps report the full 1099-G amount and then show the reduction as an adjustment to income?

[MonikaK1]

Report the full amount of the income shown on your form in the area for the type of form on which it was reported; in your case, Form 1099-G.

The new IRS Revenue Ruling, RR 25-04, that also addresses the issue of paid family leave from state programs, is currently open for comments and it is advising states on how to report this income.

See this Massachusetts DOR webpage for more information. On January 15, 2025, the IRS issued Revenue Ruling 2025-4, which explains the federal income tax implications of benefits received from a state administered paid family and medical leave program that mirrors the PFML program. The federal guidance is effective for payments made on or after January 1, 2025.

Because the Massachusetts personal income tax relies on federal law to determine whether income is included or excluded from a taxpayer’s gross income, Massachusetts will generally conform to the conclusions reached by the IRS in Revenue Ruling 2025-4 that concern federal gross income.  The Department is currently working on guidance that further explains Revenue Ruling 2025-4’s impact on Massachusetts tax law.