Issue Number:  2026-08

Inside This Issue

• Guidance on permanent expansion of paid Family and Medical Leave
• Update to FAQs on “No Tax on Overtime” deduction
• Proposed regulations for employer contributions to Trump Accounts
• Coming soon: New proposed regulations for the Saver’s Match program
• Other News

    Guidance on permanent expansion of paid Family and Medical Leave

Treasury and the IRS are providing new guidance to help employers claim the expanded federal tax credit for paid family and medical leave under the Working Families Tax Cuts.

The changes include:

• Permanent expansion of the credit
• Broader eligibility for employers with part-time workers and employees with at least six months of service
• New option to claim the credit for insurance premiums as well as wages paid during leave

These changes encourage businesses to offer up to 12 weeks of paid family and medical leave and give employers clearer rules for claiming the enhanced tax credit.

See the news release for details.

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    Update to FAQs on “No Tax on Overtime” deduction

The IRS recently updated the FAQs about the “No Tax on Overtime” Deduction under the Working Families Tax Cuts.

Notable changes include:

• The removal of information that was applicable only to the 2025 tax year
• Clarification on the limits and timing of the qualified overtime compensation deduction
• Additional information on coverage and exemptions under the FLSA.
• Detailed information on Form W-2, Form 1099-MISC, and Form 1099-NEC requirements applicable to employers and payors of qualified overtime compensation
• Information on federal income tax withholding procedures related to qualified overtime compensation
• Information on the requirement that qualified overtime compensation must be separately reported on Form W-2 to claim the deduction

Full details are available in Fact Sheet 2026-13.

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    Proposed regulations for employer contributions to Trump Accounts

Treasury and the IRS recently proposed regulations to help employers establish programs that make tax-free contributions to Trump Accounts for employees or their dependents.

The proposed rules explain how employers can contribute up to $2,500 a year and clarify that contributions must be offered fairly and not favor highly compensated employees.

The public comment period is open and goes through Sept. 25. A public hearing is scheduled on Oct. 15. Instructions for submitting comments are in the proposed regulations.

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    Coming soon: New proposed regulations for the Saver’s Match program

Treasury and the IRS will propose regulations regarding the federal Saver’s Match program, which begins in 2027.

The Saver’s Match will provide eligible taxpayers with a maximum 50% match on the first $2,000 of qualified retirement savings contributions made to an employer-sponsored retirement plan or IRA, up to $1,000 annually, and will be paid for eligible taxpayers starting in 2028, based on contributions made for the 2027 tax year.

This replaces the Saver’s Credit for retirement savings contributions and helps taxpayers participate in eligible retirement savings programs.

Regulations.gov outlines anticipated rules for implementing the program and request public comments to help develop proposed regulations. Comments can be submitted at Regulations.gov by October 5, 2026.

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    Other News

Other news:

• Treasury, IRS issue guidance on rollovers between retirement plans and individual retirement accounts
• IRS, Security Summit remind tax pros they need a Written Information Security Plan to protect client data
• IRS recognizes National Whistleblower Day with $8 billion recovered since 2007

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