Treasury and IRS Issue Guidance on Permanent Expansion of Paid Family and Medical Leave Tax Credit

The Department of the Treasury and the Internal Revenue Service (IRS) have issued Notice 2026-28, providing guidance on the employer credit for paid family and medical leave (PFML) under the Working Families Tax Cuts (WFTC). This legislation permanently expands and enhances eligibility and coverage for employers offering PFML benefits, allowing more businesses, particularly small businesses, to take advantage of a general business tax credit ranging from 12.5% to 25% of wages paid for up to 12 weeks of leave per taxable year. The guidance aims to provide clarity for employers to claim the enhanced credit, supporting American workers, families, and businesses.