Treasury, IRS Issue Guidance on the Permanent Expansion of Paid Family and Medical Leave under the Working Families Tax Cuts

WASHINGTON — The Department of the Treasury and the Internal Revenue Service (IRS) issued Notice 2026-28, providing guidance on the employer credit for paid family and medical leave (PFML) under the Working Families Tax Cuts (WFTC). The WFTC makes permanent and expands eligibility and coverage for employers offering PFML benefits to employees. “Hardworking Americans should not have to choose between caring for a loved one and earning a paycheck,” said Treasury Secretary Scott Bessent. “The Working Families Tax Cuts permanently expands the federal Paid Family and Medical Leave Tax Credit, giving businesses, especially small businesses, greater incentives to provide paid leave so workers can care for a newborn or other family member or recover from a serious illness without sacrificing their financial security.