On Aug 5, 2026 Treasury and the IRS issued Notice 2026-28 implementing OBBBA's permanent Section 45S employer credit for paid family and medical leave. The credit runs 12.5% to 25% of wages for up to 12 weeks and now offers two methods: the traditional leave-wage method or a new premium method based on PFML insurance premiums paid, regardless of whether employees actually take leave. Eligibility expands to workers with six months of service and part-timers averaging 20+ hours a week; comments are due Oct 16, 2026.
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IRS Notice 2026-28: permanent paid-leave credit adds a premium method for 2026
Why this matters for founders
If you offer or insure paid family leave, model both credit methods for 2026 — the premium method can generate a credit even in a year no one takes leave, which favors small teams that buy PFML coverage.
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