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Is my state paid family or medical leave benefit taxable?

How taxes work on your state family or medical leave benefit

Quick answer
 Tilt is not a tax advisor, so we recommend consulting a tax professional and your legal counsel for specific guidance. At a high level, the IRS confirmed in January 2025 that state paid family leave payments must be included in gross income, and the employer-funded portion of state paid medical leave payments must also be included in gross income and is subject to Social Security and Medicare taxes; the employee-funded portion is excluded from gross income and not subject to those taxes.

Who this applies to / Prerequisites

  • Employees receiving state paid family leave or state paid medical leave benefits, including District of Columbia paid leave.

Key facts

  1. An employee who receives state paid family leave payments must include those amounts in their gross income.
  2. An employee who receives state paid medical leave payments must include the amount attributable to the employer's portion of contributions in their gross income; this amount is also subject to both the employer's and employee's shares of Social Security and Medicare taxes.
  3. The amount attributable to the employee's own portion of the contributions is excluded from gross income and is not subject to Social Security or Medicare taxes.
  4. This guidance comes from IRS guidance issued in January 2025 on income and employment tax treatment of paid state leave programs.

What if it doesn't work

  • I need details specific to my state: Check your state's website (see Limits and exceptions below for links) and consult a tax professional.
  • I have questions about my specific tax situation: Tilt cannot provide tax advice — consult a tax advisor and your legal counsel.
  • If none of these apply, contact your Leave Success Manager.

Limits and exceptions

  • Tilt is a leave expert, not a tax expert, and cannot provide tax advice.
  • State-specific taxability information is available at: California, Colorado, Connecticut (select "Tax" dropdown), District of Columbia, Massachusetts, NY Paid Family Leave, NJ Temporary Disability Insurance (select "After You Get a Decision"), NJ Family Leave Insurance (select "Once You Receive a Decision"), Oregon (select Taxability Fact Sheet), Rhode Island, Washington.
  • New York Disability Benefits (NY DBL) taxability information is not published on the state's website — check with your carrier instead.

Related questions

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  • Why does my Tilt pay calculation show a different amount than what I actually receive?