This is a follow-up from the Smola Consulting Benefits Bulletin posted on 7/21/2017 regarding New York Paid Family Leave (PFL) benefits starting January 1, 2018 for new parents, family members caring for sick relatives, and employees with family members deployed abroad on active military duty.

The New York State Department of Taxation and Finance just released Notice N-17-12, offering more guidance on New York Paid Family Leave. Important takeaways from the Notice are:

  1. Benefits paid to employees will be taxable non-wage income that must be included in federal gross income
  2. Taxes will not automatically be withheld from benefits; employees can request voluntary tax withholding
  3. Premiums will be deducted from employees’ after-tax wages
  4. Employers should report employee contributions on Form W-2 using Box 14 – State disability insurance taxes withheld
  5. Benefits should be reported by the State Insurance Fund on Form 1099-G and by all other payers on Form 1099-MISC

Notice N-17-12 can be found here:

As referenced in the Notice, it is the responsibility of each employee and employer to consult with a tax advisor.

https://www.tax.ny.gov/pdf/notices/n17_12.pdf

More information can be found at:

https://www.tax.ny.gov/pdf/notices/n17_12.pdf

https://www.ny.gov/sites/ny.gov/files/atoms/files/PaidFamilyLeave_BusinessOwnerFactSheet.pdf

https://www.ny.gov/programs/new-york-state-paid-family-leave