Treasury and the IRS issued Notice 2026-28 providing guidance on employer credit for paid family and medical leave under the Working Families Tax Cuts. The permanent credit provides:

• Expanded Eligibility: claim credit for employees with six months of service and part-time employees working 20 hours or more per week.
• Expanded Coverage: claim the credit for insurance premiums to provide leave, or wages paid during leave.
• State and Local Mandates: count leave provided under state or local mandates toward the eligibility for this federal tax credit, but not toward the credit calculation.

Businesses now have greater incentives to offer up to 12 weeks of leave to employees with serious health conditions or to care for certain family members with serious health conditions.

Proposed regulations consistent with this guidance will be issued. Written comments about the guidance are requested and should be submitted before Oct. 16, 2026, through Regulations.gov.