The Internal Revenue Service and the Treasury Department issued guidance Wednesday on the permanent extension of the employer credit for paid family and medical leave under the One Big Beautiful Bill Act. Starting in 2026, employers can claim the credit for premiums paid for paid family and medical leave insurance policies, in addition to wages paid during leave. The new premium method is based on insurance premiums paid by the employer for policies covering paid family and medical leave. "The Working Families Tax Cuts permanently expands the federal Paid Family and Medical Leave Tax Credit, giving businesses, especially small businesses, greater incentives to provide paid leave so workers can care for a newborn or other family member or recover from a serious illness without sacrificing their financial security. "The permanent expansion of the credit encourages businesses to provide paid family and medical leave," said IRS CEO Frank Bisignano in a statement.