Contributions will begin January 1, 2027 with benefits to begin January 1, 2028.
Employers can begin registration through the agency portal in Fall of 2026. Employers with at least one employee in Maryland are required to register. When you register, you’ll enter your federal Employer Identification Number (EIN). All sub-agencies and divisions with the same EIN will be registered together. FAMLI allows only one registration per EIN. After registration, you can grant access to a Third-Party Agent (TPA) so they can interact with FAMLI on your behalf. Only an Authorized Officer can sign the Power of Attorney to grant this access. Registered employers will automatically be enrolled in the State Plan.
If an employer is using a private plan, it will need to be authorized by the agency. Employers with a private plan will still be required to submit wage and hour reports and claims data every quarter. You’ll also be required to keep the following records for at least 5 years:
Employers are required to notify their employees of this tax throughout their employment. Employers need to provide notice to employees beginning in July 2027, six months before benefits become available, when an employee is hired, once per year on annual notice, when an employee requests leave, or when the employer knows the employee is taking leave for a qualifying reason. The FAMLI agency will create sample notices for employers to use.
MD FAMLI will be funded through contributions from both employers and employees. Contribution amounts vary based on employer size. The contribution rate is 0.9%, split equally between employers and employees (0.45% each). This rate will apply to wages paid from January 1, 2027 through December 31, 2027. Wages will be capped following the Social Security wage cap for each employee.
The FAMLI Division will determine employer size based on the total number of employees, including those working inside and outside of Maryland. All employees falling under the same federal Employer Identification Number (EIN) are counted toward a single employer size. Independent contractors will not count toward employer size. Even employers with just one employee in Maryland must comply with FAMLI requirements.
Refund Process
Have you received a refund check from the IRS? One of the most common reasons you might receive a refund is if there is an amendment processing with the agency. When there is an adjustment to report additional wages and tax liabilities, the payment will post immediately to the account causing the appearance of a credit on the account while the paper return is processing. The IRS will issue an automatic refund for the credit to the account due to the timing delay of the adjustment posting. It is common for an amendment to take between 12-18 months to process through the IRS backlog and post to the account. However, once the adjustment is posted the balance will be due on the account with penalties and interest included.
Best practice if a refund is received from the IRS, or any tax agency filed through ProLiant, is to contact your Account Manager so ProLiant can verify that the credit amount is valid prior to cashing the check. If the credit is valid, we will let you know it is okay to cash. If the credit is erroneous, the check can be returned to the agency and applied back to the account as of the date it was originally received, which will typically reduce the penalties and interest applied to the outstanding balance.
Trump Accounts – Update
Trump Accounts began taking contributions as of July 5th 2026. The contribution limit is $5,000 for the account overall, no matter where the contribution came from.
The types of contributions are:
Employer Requirements:
Employers must establish a “Trump Account contribution program” prior to making contributions, if offering this as a benefit to their employees.
The program must be a “separate written plan” -- a standalone employer plan, distinct from other benefits like 401(k) or cafeteria plans.
Employers may rely on employee certifications regarding the Trump Account beneficiary’s relationship to the employee, date of birth and other known eligibility information. Employers must use a reasonable verification process to confirm the receiving account is a valid Trump Account.
Employers can contribute $2,500 per employee per year, limits subject to change annually for inflation. It is important to note this is per employee, not per dependent account.
Employer contributions are defined under Section 128 of the Internal Revenue Code allows employers to make tax‑free contributions to Trump Accounts, provided the contributions are made under a separate written plan for the exclusive benefit of employees. The contribution up to $2,500 is not included in wages for the employee – any amounts above the limit are generally includible in income and wages. This must be reported on the Employee W2 in Box 12 using code “TA”.
This IRS has released proposed regulations with regards to Trump account contributions. However, nothing has been finalized. There is very limited information available for payroll service providers. At this time, ProLiant will not be facilitating contributions through payroll or salary reductions until there is additional regulations established by the IRS. If an employer is choosing to provide the benefit of a contribution to an individual’s Trump account, they will need to do so as a direct contribution through their internal benefits administration – and report this to ProLiant to be included as a memo deduction and reported on the employee W-2.
We will continue to monitor the IRS guidance to be able to incorporate contributions through payroll as soon as possible.
IRS Penalty Relief
The IRS has changed the first-time abatement (FTA) of penalty process. Currently, FTA applies to taxpayers with three years of timely compliance history upon request – required on the phone. Confirmation is confirmed over the phone or in a written notification to the employer (depending on who is making the request).
Starting in the summer of 2026: FTA is transitioning to a new relief called Automatic Exemption from Penalty (AEP).
Under AEP, if you file or pay late in the current year but have timely filed returns and paid tax due for the three prior years (or 12 consecutive quarters for quarterly filers), you won’t be assessed a penalty.
The following return series are eligible for AEP consideration:
Employers will receive a letter explaining that the applicable penalties were not assessed due to good history of timely compliance. AEP is applied when the original return completes processing.
If you file an eligible, original return late, or pay the tax late, and IRS records show a history of timely compliance over the prior three years (or 12 consecutive quarters):
You are liable for payment of any unpaid tax, interest, or other penalty assessment not subject to AEP relief. Please submit any notices received to your Account Manager for review and validity of the initial penalty assessment and to research the cause of the penalty to the account. Applies to 2025 tax year and 2026 quarterly returns, and all future tax years/quarters. If a penalty is assessed, and you don’t qualify for the AEP relief, you may request penalty relief based on reasonable cause to be reviewed by the IRS.
EEOC Reporting Proposal
The U.S. Equal Employment Opportunity Commission (the Commission or the EEOC) has proposed ending its mandatory annual collection of workplace demographic data
On July 21, 2026, the EEOC voted in favor of publishing a notice of proposed rulemaking to eliminate long-standing employer demographic reporting requirements.
If finalized, would differ significantly from state and local laws that require the collection of similar demographic information.
The Commission is taking the position that EEO data reports are inconsistent with ensuring equal employment opportunities, may be unconstitutional, collect data that is not narrowly tailored or necessary to enforce antidiscrimination statutes, and impose an undue burden on employers.
EEOC Chairwoman Andrea Lucas further stated that the "EEO Data Reports stand in direct tension with Title VII's requirement that employment practices be colorblind" and that the collection of such data absent any specific allegation of discrimination "not only risks hindering effective enforcement of equal employment laws but also raises constitutional concerns."
The proposed rule is not yet final, and several steps remain before it takes effect. As of now, the proposed rule must go through a public notice-and-comment process before it is finalized.
Public comment period for the EEOC's proposal ends on August 24, 2026.
If the EEOC publishes a final rule, Congress could act under the Congressional Review Act to overturn the EEOC's action; however, even if the House and Senate pass a resolution of disapproval, it would not be effective unless signed by the president.
Impact on state and local reporting obligations: Employers should remain aware of state-level reporting obligations and should not assume that the ending of federal EEO reporting eliminates all workforce demographic reporting obligations, as state and local requirements may continue to require the collection, maintenance, or submission of similar or even more extensive data.
ProLiant will continue to monitor and provide updates on this topic.
Withholding
Computing Withholding | Idaho State Tax Commission
NEW Paid Sick Leave Policy – coming 2027
A new law was signed May 20th, 2026, that will require employers in Virginia to provide paid sick leave to their employees through a phased rollout beginning July 1st, 2027.
Employees will accrue one hour of paid sick leave for every 30 hours worked, up to 40 accrued sick hours to use. Leave will be capped at forty hours per year, and it will be carried over year-to-year, provided that the amount of leave in an employee’s leave bank will never exceed forty hours. The law provides that accrued but unused leave is forfeited at time of separation from employment.
On July 1st, 2027, when the law goes into effect, employers with 50 or more employees will be required to provide paid sick leave. On January 1st, 2028, that threshold will drop to 25 employees. On January 1st, 2029 all employers, regardless of size, will be required to offer paid sick leave.
ProLiant will continue to monitor for additional information as we get closer to the effective date.
Code of Virginia Code - Article 2.1. Paid Sick Leave