Laserfiche WebLink
contribution should be included on the employee's W-2 and does not reduce federal or state <br />taxable wages. <br />If a city chooses to pay more than the required minimum share of the premium (i.e., generally <br />in 2026 more than .44% of the total premium rate of .88%), this is additional compensation to <br />the employee and is included in the employee's federal gross income as wages. <br />Medical leave benefits will be treated two different ways for federal tax purposes. Half of the <br />benefit (the amount attributable to the employer contribution) will be treated as wages. The <br />remaining half (the portion attributable to the employee contribution) are excluded from the <br />employee's federal gross income and are not taxable. As the state outlines. the share of medical <br />leave benefits the state will pay Minnesota Paid Leave applicants counting as wages will be <br />treated as third -party sick pay, as described by the IRS in Notice 2015-16. For medical leave <br />benefits, the state will provide information to the city on a frequent basis so the city can pay <br />their portion of Social Security and Medicare taxes. Again, cities will include these payments as <br />wages on the Form W-2 issued to employees. <br />When employees apply for paid leave, they will have the option to withhold state and federal <br />taxes from their weekly benefit. If an employee chooses this option, Minnesota Paid Leave will <br />withhold 5% for state taxes and 10% for federal taxes. <br />Return to top of page <br />Your LMC Resource <br />Joyce Hottinger <br />Assistant Human Resources Director <br />(651) 281-1216 or (800) 925-1122 <br />jhottingeralmc.org <br />