--- title: "October 2025 Compliance Updates: New State Taxes, Government Shutdown & More" description: Everything HR and payroll professionals and employers will need to stay up-to-date, including legislative decisions and developments and more. image: https://blog.proliant.com/hubfs/03%20-%20Blog%20Images/Pre-2023%20Assets%20%5BDo%20Not%20Delete%5D/proliant-compliance-updates.jpg --- [![Proliant - Print Logo - No Strokes](https://blog.proliant.com/hubfs/01%20-%20Website/Logos/Proliant%20-%20Print%20Logo%20-%20No%20Strokes.svg "Proliant - Print Logo - No Strokes")](https://www.proliant.com) [Request Meeting](https://www.proliant.com/request-meeting) ** ** **Payroll** **Talent** **Workforce Management** **Benefits** **Platform** **Integrations** **ProLiant Mobile** Your employees can stay connected. **Anytime, anywhere**. ![proliant-mobile-mockup-mega-menu](https://blog.proliant.com/hubfs/01%20-%20Website/4%20-%20Main%20Pages/Home/proliant-mobile-mockup-mega-menu.png "proliant-mobile-mockup-mega-menu") [![Proliant - Print Logo - No Strokes](https://blog.proliant.com/hubfs/01%20-%20Website/Logos/Proliant%20-%20Print%20Logo%20-%20No%20Strokes.svg "Proliant - Print Logo - No Strokes")](https://www.proliant.com) [Request Meeting](https://www.proliant.com/request-meeting) ** ** **Payroll** **Talent** **Workforce Management** **Benefits** **Platform** **Integrations** **ProLiant Mobile** Your employees can stay connected. **Anytime, anywhere**. ![proliant-mobile-mockup-mega-menu](https://blog.proliant.com/hubfs/01%20-%20Website/4%20-%20Main%20Pages/Home/proliant-mobile-mockup-mega-menu.png "proliant-mobile-mockup-mega-menu") Search **Menu** ** ** [Request Meeting](https://www.proliant.com/request-meeting) ![](https://blog.proliant.com/hubfs/03%20-%20Blog%20Images/Pre-2023%20Assets%20%5BDo%20Not%20Delete%5D/proliant-compliance-updates.jpg) [Compliance](https://blog.proliant.com/compliance-updates/tag/compliance) | 6 min read # October 2025 Compliance Updates: New State Taxes, Government Shutdown & More [![ProLiant](https://blog.proliant.com/hubfs/Logos/Color%20Proliant/P%20logo%20Glassdoor.jpg)](https://blog.proliant.com/compliance-updates/author/proliant) Written by [ProLiant](https://blog.proliant.com/compliance-updates/author/proliant) Oct 28, 2025 1:14:58 PM ## **New Tax Updates** #### Minnesota – Paid Family Leave Effective: January 1, 2026 ![](https://blog.proliant.com/hs-fs/hubfs/Minnesota-png.png?width=1488&height=535&name=Minnesota-png.png)   **The premium rate will be 0.88 percent.** The premium rate is a percentage of an employee's wages that will be collected by the state from employers. The premiums will be split between employees and their employers. Employers must pay at least 50 percent of the total premium and can deduct the remainder from employee pay. Employers may also choose to pay up to 100 percent of the premium for their employees. Small employers pay a reduced premium rate.  Premiums are due up to the social security wage base limit. **Employee count**: The employee count is the largest number of Minnesota employees reported by an employer on a single wage detail report during the four-quarter period that ended September 30 of the prior year. When the program launches in 2026, this will be the highest number of Minnesota employees reported in a single quarter between October 1, 2024 and September 30, 2025. If this count is 30 or fewer employees, the employer may qualify for a reduced small employer premium rate. Independent contractors and self-employed individuals are not included in this count. Employers who qualify for the reduced small employee rate are responsible for half of the standard employer contribution. Individuals are covered by Paid Leave if they work 50 percent or more of the year in Minnesota. Employers will need an Employer Account (at uimn.org) and a Paid Leave Administrator Account (at paidleave.mn.gov). Register for or log in to your **Employer.** **Account** at [uimn.org](https://linkprotect.cudasvc.com/url?a=https%3a%2f%2fuimn.org&c=E,1,tMEZs-Ob9Cc7T0M5nwnSxm9iRlKBwu_PDAU7F_27sN-RqoH0z6Lj2JZ84Ry4Rjd1FHkVBKz2TrDO3oJnQdTNMFOfUWlow5UN0vVapUZILHxtLSUxDd4p&typo=1&ancr_add=1). Then, designate a [Paid Leave Administrator](https://links-2.govdelivery.com/CL0/https:%2F%2Fuimn.org%2Femployers%2Fpaid-leave%2Fpaid-leave-admin-assignment.jsp/1/01010199befcce38-5a4a49a7-ebdd-452f-8ae9-65954c1f6abb-000000/hBFqcemVK7EA4mkzfLRW0X0XrtYtdgeZg6T-Hl0cwH4=425) in your Employer Account. Create a Paid Leave Administrator Account at paidleave.mn.gov. You must notify your employees about Paid Leave by **December 1, 2025**. - Hang the Paid Leave [**workplace poster**](https://links-2.govdelivery.com/CL0/https:%2F%2Fmn.gov%2Fdeed%2Fassets%2Fpaid-leave-mandatory-employer-poster-acc_tcm1045-700342.pdf/1/01010199befcce38-5a4a49a7-ebdd-452f-8ae9-65954c1f6abb-000000/Xq3LEm82wJYNJh51DzG3egWwyTDM8fBjnxCk5qM0cIA=425)** ** - Provide [**individual notices**](https://links-2.govdelivery.com/CL0/https:%2F%2Fmn.gov%2Fdeed%2Fassets%2Fpaid-leave-notice-employee_tcm1045-707783.docx/1/01010199befcce38-5a4a49a7-ebdd-452f-8ae9-65954c1f6abb-000000/e5pcymiljgNNOEO6WPoDKH7nNBL1XL2bmrYvfx3dq3Q=425)** **to your employees. [Employers/Minnesota Paid Leave](https://mn.gov/deed/paidleave/employers/) #### MARYLAND – Paid Family Leave DELAYED: contributions have been delayed until January 1, 2027 with benefits to begin January 1, 2028. This was confirmed through an agency newsletter received 4/08/2025 that confirmed the final bill passed to delay the start of this tax. [Paid Family and Medical Leave](https://paidleave.maryland.gov/pages/default.aspx) ## ** Federal Updates ** #### 2026 Social Security Wage Base Increase Social Security tax wage base limit will increase to **$184,500** for 2026, up from $176,100 for 2025. The maximum 2026 tax amount paid per employee $11,439, or 6.2% of the taxable wage base, increased from $10,918.20 for 2025. Employers match the employee amount with equal contribution. The other component of the FICA tax, the Medicare tax, remains 1.45% and is not subject to the Social Security wage base. The Additional Medicare tax of 0.9% will continue to apply to individuals with annual earned income of more than $200,000 and married couples filing jointly with annual earned income of more than $250,000. [2026 Cost-of-Living Adjustment (COLA) Fact Sheet _ News _ SSA](https://aboutbtax.com/bjVT) #### Government Shutdown As of October 1, 2025, the federal government has shut down. This impacts multiple federal agencies and services. The United States federal government failed to pass a budget, a federal government shutdown began at midnight on Wednesday, October 1, 2025. A federal government shutdown affects all federal agencies, the United States Citizenship and Immigration Services (USCIS). In such cases, E-Verify services are unavailable during the shutdown period. During an E-Verify outage, employers are still required to complete Form I-9 for new hires, and after E-Verify is again available, employers should process E-Verify cases as required. The Internal Revenue Service (IRS) will continue to collect taxes and accept filings throughout the shutdown. As such, ProLiant will continue to make employer deposits and submit tax returns to the IRS for payrolls processed and quarterly filings/deposits. Correspondence with and processing at the IRS, including amended returns, may take additional time due to delays caused by the shutdown. #### OBBB Update We are anticipating final regulations from the IRS for the One Big Beautiful Bill. Communication may be delayed due to the government shut down. The IRS has released a list of occupations recognized that receive tips: Treasury Tipped Occupation Code, provides a three-digit code and descriptions for the occupations listed within the proposed regulations. Each occupation on the list includes a Treasury Tipped Occupation Code (TTOC). Employers must report this code in Box 14b of the 2026 Form W-2, along with qualified tips in Box 12 (code TP). The proposed regulations group the occupations into eight categories: - 100s – Beverage and Food Service - 200s – Entertainment and Events - 300s – Hospitality and Guest Services - 400s – Home Services - 500s – Personal Services - 600s – Personal Appearance and Wellness - 700s – Recreation and Instruction - 800s – Transportation and Delivery [Treasury, IRS issue guidance listing occupations where workers customarily and regularly receive tips under the One, Big, Beautiful Bill | Internal Revenue Service](https://www.irs.gov/newsroom/treasury-irs-issue-guidance-listing-occupations-where-workers-customarily-and-regularly-receive-tips-under-the-one-big-beautiful-bill) Reporting requirements for both overtime and tips are still pending. We will continue to monitor and provide guidance as new updates become available. **ACTION ITEM: ** If your overtime policy differs from the FLSA standard overtime requirements (over 40 hours worked in the workweek at 1.5 pay rate), please reach out to your account manager to provide details on your policy so we can ensure reporting is accurate for the overtime reporting. ** #### Secure 2.0 The Internal Revenue Service (IRS) issued final regulations for the Roth Catch-up provisions of the SECURE 2.0 Act. On September 16, 2025, the IRS issued final regulations for certain provisions of the 2022 SECURE 2.0 Act, specifically, the SECURE 2.0 requirements that catch-up contributions to 401(k), 403(b), and governmental 457(b) retirement plans be made as post-tax Roth contributions for employees who earned over $145,000 in FICA taxable wages (Box 3 of the W-2) in the previous calendar year. This contribution requirement is effective for plan years starting after December 31, 2025. The Roth catch-up requirement applies beginning **January 1, 2026. **For employers that choose to include Roth catch-up in their retirement plans, these upcoming compliance requirements will need close coordination with retirement plan recordkeepers and payroll service providers.**  ** The regulations allow employers to adopt a plan design that, by default, enrolls employees who meet the FICA wage threshold into the post-tax Roth catch-up, without the need for the employee to make a separate election. If a deemed election plan design is adopted, employees must be given an “effective opportunity” to change their elections or opt- out of Roth catch-up contributions entirely. Due to these new requirements, employers must make important choices about the design of their retirement plan offering. Without a Roth plan, employees who earn $145,000 or more will **not** be able to make any catch-up contributions, while employees who earn less will continue to be eligible for pre-tax catch-up contributions. If an employer chooses not to include a Roth option, FICA wages of employees for the prior calendar year will need to be monitored to determine if an employee who earned above the FICA wage threshold must be prevented from making catch-up contributions. Employers must also decide whether to adopt a deemed election plan design. A plan must be developed to manage the transition to post-tax once the pre-tax limit is reached. ProLiant is developing an audit report to flag employees subject to the new catch-up rules. ## **State Updates** #### California CalSavers California state law requires employers of California workers to participate in CalSavers if they do not sponsor a retirement plan and have one or more eligible employee. Each activity must be completed by specific deadlines. In 2022, California passed legislation ([SB-1126](https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB1126)) to expand the CalSavers mandate to employers with at least one employee. Eligible employers with 1-4 employees are required to register or request exemption by December 31, 2025. Employers with 1-4 employees will have began receiving early notification starting in February 2025. If you believe your business is exempt from the state mandate, you must [request an exemption](https://click.calsavers.ca.gov/?qs=73e434e6f3f7babc125338faa3fa6f4ec46d8f71235bf0ec2b25411a62ce9a832cdb96c8e540d3f87f89238e44a18b4b0a4e92622895830c285b2a8cc8a40eb9). Contact the department at: [clientservices@calsavers.com](mailto:clientservices@calsavers.com) or [(855) 650 - 6916](tel:18556506916) to check your status or application deadline. CalSavers is offering an incentive for early registration: You could win $500 if you register and start facilitating by November 30, 2025. 1000 employers will be randomly selected. [View Official Promotion Rules](https://click.calsavers.ca.gov/?qs=73e434e6f3f7babc37c67f2e4f2ea31fb0e285a630cb5881adfdf50d92a59924c7eb2f6a2be131e11fa40326233085d1104093cfee088df1dc3abfccf2b1d651). After you register, your only ongoing responsibilities are to provide employee information and submit contributions for participating employees to CalSavers. [CalSavers | Employer Information](https://employer.calsavers.com/?utm_source=80daymktlearnmore&utm_campaign=CalSaversWave2025&utm_medium=email&utm_audience=em&j=3708840&sfmc_sub=151264408&l=981047_HTML&u=50732994&mid=523018151&jb=7001) #### Illinois Illinois employees of employers with at least 16 employees are entitled to unpaid neonatal intensive care leave, under a bill effective June 1, 2026. #### New York MCTMT Tax The NY MCT tax has updated rates effective for the 3Q25 tax period. ![MCTMT Tax Table](https://blog.proliant.com/hs-fs/hubfs/03%20-%20Blog%20Images/03%20-%20Compliance%20Updates/MCTMT%20Tax%20Table.jpg?width=1650&height=1275&name=MCTMT%20Tax%20Table.jpg) #### Ohio - Local Regional Income Tax Agency (RITA) Canal Fulton and New Lebanon, Ohio, are joining the Regional Income Tax Agency for administration of their local taxes effective October 1, 2025. Income tax rates: - Canal Fulton – 2% - New Lebanon – 1% #### Rhode Island On October 2, 2025, Rhode Island confirmed in a tax advisory, that the federal One Big Beautiful Bill Act’s no-tax-on-tips and -overtime provisions **do not** apply for state income tax purposes. [H.R. 1 Decoupling Guidance](https://aboutbtax.com/bjOc) ### About ProLiant *ProLiant puts the human in human resources. We provide a fully integrated, cloud-based HCM solution that simplifies payroll and HR processes. 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