New York SBDC Research Network

The New York State Department of Taxation and Finance, Notice 17-12 The State’s new Paid Family Leave program has tax implications for New York employees, employers, and insurance carriers, including self-insured employers, employer plans, approved third-party insurers, and the State Insurance Fund. The Department of Taxation and Finance has reviewed the New York statute, implementing regulations, and applicable laws, case law and federal guidance and has consulted with the Internal Revenue Service regarding the appropriate tax treatment of family leave contributions and benefits under the New York program. Based upon this review and consultation, the following guidance: • Benefits paid to employees will be taxable non-wage income that must be included in federal gross income • Taxes will not automatically be withheld from benefits; employees can request voluntary tax withholding • Premiums will be deducted from employees’ after-tax wages • Employers should report employee con...

From Complete Payroll : New York’s Paid Family Leave program is designed to provide wage replacement to employees for a variety of family and/or medical reasons, including maternity/paternity leave, caring for a close relative with a serious health condition and relieving family pressures when someone is called to active military service. The program also guarantees that employees are able to return to their job and keep their health insurance, provided they continue to contribute their portion while on Paid Family Leave. The law was signed by Governor Andrew Cuomo on April 4, 2016 and will begin the first of four phases of implementation on January 1, 2018. Just like the payroll deduction is mandatory for all New York employees, it's mandatory for all New York employers to set up the payroll deduction and offer Paid Family Leave for all the employees that qualify. That means businesses must work with their payroll provider, insurance broker/carrier and HR person to create...