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November 2, 2021
2021-1998

New York announces increase in Paid Family Leave insurance contribution rate for 2022

The New York Workers' Compensation Board announced that the employee contribution rate for Paid Family Leave (PFL) insurance will remain at 0.511% for 2022 up to the current statewide average weekly wage (SAWW) of $1,594.57, capped at the maximum contribution of $423.71. The PFL employee contribution rate is unchanged from 2021; however, the SAWW is increased from $1,450.17 and the annual maximum contribution is increased from $385.34.

Note that under Department of Tax Notice No. N-17-12, employee PFL contributions must be deducted on an after-tax basis. Pretax contributions are not allowed. Employers can choose to pay all or a portion of the employee's PFL contribution; however, employer PFL contributions are not required.

Opting out/waivers

PFL coverage (and contributions) is not optional for eligible employees unless either of the following applies:

  • The employee is regularly scheduled for less than 20 hours per week and will not work 175 days in a year
  • The employee is regularly scheduled for 20 or more hours per week but won't be employed for 26 consecutive weeks

Employers must offer the PFL waiver form to all employees who meet the above criteria. When employees waive PFL coverage, PFL contributions are not deducted from their wages and they are not eligible for PFL benefits.

Employers should keep completed PFL waivers on file. Employee waivers will be automatically revoked if employees' work schedules change such that they meet the eligibility requirements. Employees may also revoke their waivers at any time.

PFL reporting

Employee PFL contributions are required to be reported in Form W-2, box 14 as state disability insurance taxes.

While Department of Tax Notice No. N-17-12 states that PFL benefits paid by the New York State Insurance Fund are reported on Form 1099-G and by all other payers on Form 1099-MISC, keep in mind that these instructions apply only for New York reporting purposes. Under the current federal reporting requirements, and absent legislation or specific guidance, PFL benefits paid by other than a state fund are reported on Form W-2. For more information see our special report.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (kristie.lowery@ey.com)
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)

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