TAX CONSIDERATIONS FOR NYS'S NEW PAID FAMILY LEAVE PROGRAM

According to the New York State Department of Taxation and Finance, 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 offers the following guidance:

• Benefits paid to employees will be taxable non-wage income that must be included in federal gross income;
• Taxes will not be withheld automatically from benefits; employees can request voluntary tax withholding;
• Premiums will be deducted from employees' after-tax wages;

• Employers should report employee contributions on Form W-2, using Box 14-State disability insurance taxes withheld; and

• Benefits should be reported by the State Insurance Fund on Form 1099-G and by all other payers on Form 1099-MISC.

The Department noted that it is the responsibility of each employee and employer/insurance carrier to consult with its tax advisor.