Taxes on Paid Family and Medical Leave (PFML) benefits

Learn more about the taxes you may need to pay while collecting PFML benefits and what forms to expect from the Department of Family and Medical Leave ("the Department").

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 several factors, including:

• 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. Additionally, certain categories of workers, such as personal care attendants and family child care providers may be subject to taxes on medical leave benefits. If applicable, 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 typically not be subject to FICA (Social Security and Medicare) tax withholdings. If your employer is exempt from Social Security or Medicare taxes, these taxes 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 tax return for that year. 

We will mail the form to the address we have on file for you based on the information you provided to the Department.  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-G forms issued by Massachusetts DFML will show:

The Department's contact information:
Commonwealth of Massachusetts
DFML - Paid Medical Leave Benefits OR DFML - Paid Family Leave Benefits
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

FAQs on PFML 2025 1099-G Forms

What should I do if the benefit amount listed on my 1099-G is incorrect?

The benefit amount listed on the form should reflect the taxable Massachusetts PFML payments you received during the calendar year. Please note that the amount of taxable medical leave benefit payments listed on your form 1099-G may be different than the total amount you received during the year. This is because only some medical leave benefit payments are taxable. If you think that your 1099-G form is inaccurate, please call the DFML tax line at 855-610-9905.

I received medical leave benefits, so why is the amount in box 1 zero?

A 1099-G form for medical leave payments reports the paid medical benefits that were considered taxable (not the total amount of benefit payments). If you received medical leave benefit payments from DFML, but box 1 of your 1099-G is zero, that means that any payments you received were not considered taxable. Learn more about the taxability of PFML payments.

Why did I receive multiple 1099-G forms from Massachusetts?

If you took two different types of PFML leave in 2025 you may receive two separate 1099-G forms from DFML: one for family leave payments and one for medical leave payments.

If you received benefit payments from more than one Massachusetts program, you may receive more than one 1099-G from Massachusetts. You can tell which form is for which program by looking at the Payer Information section of the form. If the payer is the Department of Unemployment Assistance, visit theirtax page for more information.

I did not take a medical or family leave in 2025 and I did not receive any benefit payments from DFML, why did I receive a 1099-G?

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 [phone]

or

• Fill out the DFML Fraud Reporting form

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 

Frequently Asked Questions on PFML Taxability

Can I change my tax withholding?

If federal employment tax withholding (Medicare and/or Social Security) is required from your medical leave benefit, you cannot change the amount or opt out.

If you chose to have state and federal income taxes withheld when you applied, you may change your income tax withholding by calling the DFML contact center [phone].

How do I know if my employer is tax exempt?

Federal employment taxes apply to most employers. If you are unsure, talk to a tax professional.

Will my tax withholding be different if I go from medical leave for pregnancy to family bonding leave?

The taxes withheld from your benefit payments might vary for different leave types. For example, if you take medical leave for pregnancy or childbirth, federal employment taxes may be withheld from your medical leave benefit payments. If you then start family bonding leave, your benefit payment amount might change because Medicare and Social Security taxes will not be deducted from family leave benefits. Your federal and state income tax withholding choice will remain the same.

How are taxes on PFML benefit payments different than the PFML contributions that are withheld from my paychecks?

If you have money deducted from your regular paycheck for PFML, that money goes to the PFML Family and Employment Security Trust Fund. Income and FICA (social security and Medicare) taxes may be deducted from your PFML benefits.

• PFML Paycheck 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.
• Taxes on PFML Benefit Payments that were received in a given calendar year vary. The amount and type of taxes withheld on PFML benefit payments depends on several factors, including your individual taxability, your employer’s taxability, your income tax withholding choice, the type of leave taken, and your employer’s workforce size.

Date published:	April 1, 2022
Last updated:	October 8, 2025