Treasury and IRS Issue Guidance on Expanded Paid Family and Medical Leave Tax Credit

The U.S. Department of the Treasury and the IRS have released new guidance regarding the permanent expansion of the Paid Family and Medical Leave (PFML) Tax Credit under the Working Families Tax Cuts. Effective in 2026, this guidance provides employers with clarity on how to claim the enhanced credit, which ranges from 12.5% to 25% of wages paid for up to 12 weeks of leave, aiming to incentivize businesses to offer paid leave benefits.