At the time of writing, the IRS’s main Section 45S FAQs still say the employer credit for Paid Family and Medical Leave [PFML] applies only to wages paid in tax years beginning before January 1, 2026. That is no longer current.
Section 45S has been made permanent.
And in Notice 2026-28, the IRS has now issued guidance on important changes applying to tax years beginning after December 31, 2025.
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Key changes to Section 45S include:
• A choice between calculating the credit using qualifying leave wages or qualifying PFML insurance premiums.
• Expanded employee eligibility, including an employer election to reduce the minimum employment period from one year to six months.
• Revised rules for part-time employees, controlled groups, and state- or locally mandated leave.
• A continuing credit of 12.5% to 25% of qualifying amounts.
The IRS has also published an updated Section 45S employer summary. But its longstanding FAQs — last marked as updated in February 2023 — still describe the credit as expiring at the end of 2025 and direct readers to 2018 guidance.
The disconnect and confusion is a useful warning.
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Expanded Eligibility But More Complexity
Section 45S is not disappearing. But determining eligibility, calculating potential credits, and assembling the evidence needed to substantiate them has become more — not less — dependent on accurate, current data across leave, payroll, benefits, policies, and workforce systems.
Employers should not assume the opportunity has expired. Nor should they rely on a single webpage to determine what may now be available.
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Powered by BENEFITSCAPE, BeneSphere includes the embedded domain intelligence to identify and manage Section 45S credits for employers — across systems, data sources, user touchpoints, and the latest regulatory requirements.
BeneSphere assembles the audit-ready data required to substantiate Section 45S Tax Credits and deliver Benefits Assurance to all stakeholders in a governed benefits ecosystem.
Employers can contact BENEFITSCAPE at +1 508-655-3307 or email info@benefitscape.com and request a Section 45S credit estimate.
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