Taxability of PFML Benefits
On January 15, 2025, the IRS issued Revenue Ruling 2025-4, which explains the tax treatment of contributions to and benefits received from state administered paid family and medical leave programs, as well as the related reporting requirements.
Will My PFML Benefit Payments be Taxed?
The type and amount of taxes that will be taken out of your PFML benefit payments will depend on the following:
- Your employer’s workforce size
- The type of leave you are taking
- Your withholding choices
Federal Employment Taxes
If your employer has 25 or more employees, there may be tax withholdings on your medical leave payments. Any medical leave payments made on or after January 1, 2026, will be subject to automatic FICA (Social Security and Medicare) tax withholdings. This is in accordance with IRS guidance.
If your employer has fewer than 25 employees, your benefit payments will not be subject to FICA (Social Security and Medicare) tax withholdings. If your employer is exempt from Social Security or Medicare taxes, they will not be withheld from your benefit payments.
Family leave benefit payments are not subject to FICA (Social Security and Medicare) tax withholdings.
Income Taxes on PFML Benefits
When you apply for leave through DFML, you can choose to have state and federal income taxes withheld from your weekly benefit payments. If you decide to have income taxes withheld, you may choose between:
- Withholding 5% for state income taxes and 10% for federal income taxes (most common) or
- withholding 5% for state income taxes and a custom dollar amount for federal income taxes (refer to IRS Form W-4S for custom dollar amount withholding).
If you're unsure whether you want to withhold taxes, we recommend speaking with a tax professional about how IRS decisions could affect your personal tax liability. We cannot offer guidance or advice for individual tax situations.
Click here to find a tax professional to help with your taxes.
2025 1099-G Tax Forms
The Department issues 1099-G forms to all employees who received PFML benefits in the prior calendar year. You will report the amount stated in box 1 of the 1099-G on your Massachusetts tax return for that year.
We will mail the form to the address we have on file for you based on what you told us in your application. In addition, you can download your 1099-G tax form by logging in to your PFML account. Learn more about how to download your tax form.
The 1099-Gs issued by Massachusetts PFML will show:
The Department's contact information-
Commonwealth of Massachusetts
MA Department of Family and Medical Leave
P.O. Box 838
Lawrence, MA 01842
The Department's Employer Identification Number (EIN)
Your name and address
The last 4 digits your Social Security Number
The amount of the PFML benefits you received in 2025 in “Box 1”
Additional Information
If you think the amount listed on your 1099-G form is incorrect:
Once you have your form, the benefit amount listed on the form should reflect your Massachusetts PFML payments during the calendar year. If you think this is inaccurate, please call the DFML tax line at 855-610-9905.
If you have received multiple 1099-G forms from Massachusetts:
If you received benefits from more than one program, you may receive more than one 1099-G. You can tell which form is for which program by looking at the Payer Information section of the form. If the payor is the Department of Unemployment Assistance, visit their tax page for more information.
If you haven’t received your 1099-G form:
If you received Massachusetts PFML benefits in 2025 and you have not received your form by mid February, please call the DFML tax line at 855-610-9905.
If you received a 1099-G form for PFML benefits but you did not file for or receive benefits:
You may be the victim of fraud. To report fraud to DFML:
- Call the Department’s Contact Center Fraud Reporting Line at (857) 366-7201
or
- Fill out the DFML Fraud Reporting form
Taxes on PFML benefits vs. contributions to the PFML Family and Employment Security Trust Fund:
- An individual must pay taxes on benefits if they received payments from PFML in a given calendar year.
- Contributions to the PFML Family and Employment Security Trust Fund are withheld from Massachusetts employees’ paychecks to fund the program. Most Massachusetts employers must make payroll withholdings on behalf of their workforce to comply with the Paid Family and Medical Leave (PFML) law.
Employer Responsibilities for the Tax Treatment of PFML Benefit Payments
Employers with 25 or more employees will be responsible for remitting the employer share of FICA (Social Security and Medicare) and FUTA taxes on employee medical leave benefit payments made on or after January 1, 2026. Employers will also be responsible for reporting these medical leave benefits on the employee’s W-2. DFML will provide employers with notice of the payments and taxes withheld via daily payment updates in the employer portal. Employers are responsible for complying with their own tax remitting and reporting obligations.
Learn more about employer tax remitting and reporting obligations.
For detailed information, read A memo from the Massachusetts Department of Family and Medical Leave (DFML) regarding IRS Revenue Ruling 2025-4
| Date published: | April 1, 2022 |
|---|---|
| Last updated: | October 8, 2025 |