Bulletin No. 2026–34

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2026–34

August 17, 2026

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

INCOME TAX

SPECIAL ANNOUNCEMENT

Notice 2026-28, page 177.

Announcement 2026-14, page 180.

This notice provides guidance on new requirements for the

employer credit for paid family and medical leave under section 45S of the Internal Revenue Code following amendments

made by Pub. L. 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill Act. The credit may

be claimed by eligible employers and is equal to a percentage

of wages paid or premiums paid or incurred with respect to

qualifying employees for paid family and medical leave.

Finding Lists begin on page ii.

This Announcement provides a revision to page 85, Part 6,

Section 6.1.1 of Rev. Proc. 2026-18, 2026-30 I.R.B. 53 (July

20, 2026) to specify that Form 1099-B, like all other 2-to-apage forms, is 4.5 inches in height within the border lines

and that all 3-to-a-page forms are 2.84 inches in height within

the border lines.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and

enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal practices and procedures that affect the rights and

duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature are

deleted to prevent unwarranted invasions of privacy and to

comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

for the matters published during the preceding months. These

monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

August 17, 2026 

Bulletin No. 2026–34

Part III

Guidance on the employer

credit for paid family

and medical leave under

section 45S

Notice 2026-28

I. PURPOSE

This notice provides guidance on the

employer credit for paid family and medical leave under section 45S of the Internal Revenue Code (Code), as amended by

section 70304 of Pub. L. 119-21, 139 Stat.

72 (July 4, 2025), commonly known as the

One, Big, Beautiful Bill Act (OBBBA).

The Department of the Treasury (Treasury

Department) and the Internal Revenue

Service (IRS) intend to publish proposed

regulations under section 45S that include

the guidance contained in this notice

(forthcoming proposed regulations).

II. BACKGROUND

Section 45S was added to the Code by

section 13403 of Pub. L. 115-97, 131 Stat.

2504 (December 22, 2017), commonly

known as the Tax Cuts and Jobs Act

(TCJA) as a temporary provision applicable to wages paid in taxable years beginning on or before December 31, 2019. The

termination date set forth in section 45S(i)

by the TCJA was extended by the “Further

Consolidated Appropriations Act, 2020,”

Pub. L. 116-94, 133 Stat. 2534, enacted

on December 20, 2019, and by the “Consolidated Appropriations Act, 2021,” Pub.

L. 116-260, 134 Stat. 1182 (December

27, 2020). The OBBBA amended various

provisions of section 45S and made section 45S permanent.

Section 45S establishes the paid family and medical leave credit for employers

that provide paid family and medical leave

(the credit).1 For purposes of the paid

family and medical leave credit, section

45S(d) defines an employee by cross-reference to section 3(e) of the Fair Labor

Standards Act, which generally defines

employee as any individual employed

by an employer. Under section 45S(g),

wages qualifying for the credit are wages

subject to the Federal Unemployment Tax

Act (FUTA) pursuant to section 3306(b),

determined without regard to the $7,000

FUTA wage limitation.

Section 70304(a)(1)(A) of the OBBBA

amended section 45S(a)(1) by setting

forth an additional method for calculating

the credit. As amended, section 45S(a)(1)

provides that the employer may elect to

determine the amount of the credit based

on either the wages actually paid to qualifying employees while they are on family

and medical leave (the wage method), or,

if the employer maintains an insurance

policy with regard to the provision of paid

family and medical leave during the taxable year, the premiums paid or incurred

by the employer with respect to that insurance policy during the taxable year (the

premium method). Section 70304(a)(1)

(B) of the OBBBA added section 45S(a)

(3) to the Code to provide that the determination of the rate of payment under the

premium method is made without regard

to whether any qualifying employees were

on family and medical leave during the

taxable year.

Section 45S(c)(3) previously provided

that all persons treated as a single employer

under section 52(a) or (b) should be treated

as a single taxpayer. Section 70304(a)(3)

of the OBBBA amended the aggregation

rule in section 45S(c)(3) to provide generally that all persons treated as a single

employer under section 414(b) and (c) are

treated as a single employer, and to provide an exception to the application of

the aggregation rule for any person who

establishes to the satisfaction of the Secretary that the person has a substantial and

legitimate business reason for failing to

provide a written policy that satisfies the

requirements of section 45S(c)(1) or (c)

(2).

Section 70304(a)(3) of the OBBBA

also amended section 45S(c)(4) by modifying the treatment of leave required by

state or local law or paid for by state or

local governments so that such leave is

taken into account for purposes of determining the amount of paid family and

medical leave provided by the employer

for purposes of determining whether the

employer is an “eligible employer” that

may claim the credit. However, such leave

continues not to be taken into account for

purposes of calculating the amount of the

credit under section 45S(a).

Section 70304(a)(4) of the OBBBA

amended section 45S(d) by modifying the

definition of qualifying employee to limit

that definition to employees customarily

employed for not less than 20 hours per

week and to permit an employer to elect

to include employees after a six-month

period (rather than a one-year period) of

employment.

The OBBBA also amended section 280C(a) to provide that no deduction

shall be allowed for that portion of the

premiums paid or incurred for the taxable year which is equal to that portion of

the paid family and medical leave credit

which is determined for the taxable year

under section 45S(a)(1)(B).2

The Treasury Department and the IRS

issued guidance regarding section 45S in

Notice 2018-71, 2018-41 IRB 548.

III. GUIDANCE

This notice modifies Notice 2018-71 to

provide guidance regarding the premium

method. The Treasury Department and the

IRS anticipate that the forthcoming proposed regulations will be consistent with

the guidance in this section III.

A. Premium Method

Q-1. To determine whether an

employer is eligible to claim the credit,

and to calculate the amount of the credit,

how do the criteria under the premium

method compare to the criteria under the

wage method?

A-1. The determination of whether an

employer is eligible to claim the credit and

Section 38(b)(32) provides that the amount of the current year business credit under section 38 includes the paid family and medical leave credit under section 45S.

Section 280C(a) continues to provide that no deduction shall be allowed for that portion of the wages or salaries paid or incurred for the taxable year which is equal to the sum of the credits

determined for the taxable year under section 45S(a)(1)(A).

1

2

Bulletin No. 2026–34

177

August 17, 2026

the amount of the credit under the premium

method is based on whether and the extent

to which the premium funds a benefit for

which a credit would be available under

the wage method. Thus, a credit may be

claimed for a premium that funds a benefit for which a credit would be available

under the wage method if the benefit were

paid (creditable coverage). If any portion

of the premium provides funding for leave

that would not be eligible for credit under

the wage method, that portion of the premium is not eligible for credit under the

premium method.

Q-2. Is a premium (or portion thereof)

paid or incurred (as defined in section 7701(a)(25)) for creditable coverage

if it is for coverage with respect to leave

that would not be paid family or medical

leave as defined in section 45S(e)?

A-2. No. A premium (or portion

thereof) is not paid or incurred for creditable coverage if it is for coverage with

respect to leave that would not be paid

family or medical leave as defined in section 45S(e).

Q-3. Is a premium (or portion thereof)

paid or incurred for creditable coverage if

it is for coverage with respect to leave that

would be payable to an individual who

is not a qualifying employee within the

meaning of section 45S(d) at the time the

premium is paid or incurred?

A-3. No. A premium (or portion

thereof) is not paid or incurred for creditable coverage if it is for coverage with

respect to leave that would be payable

to an individual who is not a qualifying

employee within the meaning of section

45S(d) at the time the premium is paid or

incurred.

Q-4. Is a premium (or portion thereof)

paid or incurred for creditable coverage if

it is for coverage with respect to leave that

is required by state or local law or paid for

by a state or local government?

A-4. No. A premium (or portion

thereof) is not paid or incurred for creditable coverage if it is for coverage with

respect to leave that is required by state

or local law or paid for by a state or local

government.

Q-5. Is a premium (or portion thereof)

paid or incurred for creditable coverage if

it is for coverage that provides a benefit

that would not constitute wages as defined

in section 45S(g)?

August 17, 2026

A-5. No. A premium (or portion

thereof) is not paid or incurred for creditable coverage if it is for coverage that

provides a benefit that would not constitute wages as defined in section 45S(g).

For an example of compensation that does

not constitute wages as defined in section 45S(g), see Q&A-24, Example 2 of

Notice 2018-71.

B. Allocation of Qualifying Premium

Q-6. How does an employer determine

the amount of premiums that are paid or

incurred for creditable coverage for purposes of the premium method if the premiums are for an insurance policy that

provides both creditable coverage and

noncreditable coverage?

A-6. In the case of a premium paid

or incurred for an insurance policy that

provides both creditable coverage and

noncreditable coverage (a blended premium), an eligible employer must allocate the premium between the creditable

coverage and the noncreditable coverage.

A premium is a blended premium if, for

example, it is for coverage that provides

both qualifying paid family and medical

leave and other types of leave, or coverage

for qualifying employees and nonqualifying employees. A blended premium may

be allocated using any reasonable method

that is consistent with the policy terms and

supported by contemporaneous records.

To be reasonable, a method must include

objective criteria and must be applied

consistently for the taxable year and to all

persons treated as a single employer under

the aggregation rule in section 45S(c)(3).

C. Electing Between Premium Method

and Wage Method

Q-7. May an employer claim the credit

using both the wage method with respect

to certain leave, and the premium method

with respect to other leave?

A-7. Yes, provided that both the premium and the wage credit are not claimed

as to a particular instance of leave. An

employer may claim the credit using the

wage method for certain leave, and the

premium method for other leave. However, an employer may not use the wage

method to claim a credit for wages paid

to the extent that the employer claims a

178

credit using the premium method for creditable coverage that funds such benefits (or

vice versa). For example, if an employer

pays a premium for creditable coverage

and claims a credit for that premium, the

employer may not also claim the credit

for benefits later funded by that same premium (via reimbursement or otherwise).

In contrast, if the benefits paid during that

instance of leave are partially funded by

the premium and partially funded from the

employer’s general assets, the wage credit

may be claimed for the portion funded

from the employer’s general assets and

the premium credit may be claimed for the

portion funded by the premium.

IV. FORTHCOMING PROPOSED

REGULATIONS

It is anticipated that the forthcoming proposed regulations will be consistent with the guidance contained in

this notice and will also address other

issues. It is further anticipated that the

forthcoming proposed regulations, when

finalized, would apply prospectively to

wages and insurance premiums paid

or incurred after issuance of the final

regulations. Taxpayers may rely on the

guidance contained in this notice for

taxable years beginning after December

31, 2025, and before the issuance of the

proposed regulations.

V. REQUEST FOR COMMENTS

This notice generally provides guidance that the Treasury Department and the

IRS intend to incorporate into proposed

regulations. The proposed regulations will

provide interested parties with an opportunity to comment on the issues addressed

in the proposed regulations. However, to

assist in development of the proposed regulations, the Treasury Department and the

IRS request comments on all aspects of

this notice and any other issues regarding

implementation of the amendments to section 45S by the OBBBA. Specifically, the

Treasury Department and the IRS request

comments on the following:

1. The factors that may be used to allocate a blended premium. Comments

are also requested on how employers

may support and substantiate allocation determinations.

Bulletin No. 2026–34

2.

The application of section 45S(a)(1)

(B) and section 45S(c)(4) to premiums paid or incurred by an employer

for paid family and medical leave

through a voluntary paid family and

medical leave program facilitated by

a state and administered by a private

insurance company.

3. What constitutes a substantial and

legitimate business reason under section 45S(c)(3) for failure to provide

a written policy described in section 45S(c)(1) or (2).

Written comments should be submitted on or before October 16, 2026. Consideration will be given, however, to any

written comment submitted after that

date, if such consideration will not delay

the issuance of the proposed regulations.

Bulletin No. 2026–34

The subject line for the comments should

include a reference to Notice 2026-28.

Comments may be submitted electronically via the Federal eRulemaking Portal

at https://www.regulations.gov (type IRS2026-0496 in the search field on the regulations.gov homepage to find this notice

and submit comments). Alternatively,

comments may be submitted by mail to:

Internal Revenue Service, CC:PA:01:PR

(Notice 2026-28), Room 5503, P.O. Box

7604, Ben Franklin Station, Washington,

DC 20044. All commenters are strongly

encouraged to submit comments electronically. The Treasury Department and the

IRS will publish for public availability

any comment submitted electronically,

or on paper, to the IRS’s public docket on

https://www.regulations.gov.

179

VI. EFFECT ON OTHER

DOCUMENTS

Section D of Notice 2018-71 is modified to provide guidance regarding the

premium method.

VII. DRAFTING INFORMATION

The principal author of this notice

is Christopher Dellana of the Office of

Associate Chief Counsel (Employee

Benefits, Exempt Organizations, and

Employment Taxes), though other Treasury Department and IRS officials participated in its development. For further

information regarding this notice contact

Mr. Dellana at (202) 317-5500 (not a tollfree call).

August 17, 2026

Part IV

Correction to Rev. Proc.

2026-18

Announcement 2026-14

Due to changes in measurements, the

third and fourth paragraphs on page 85,

August 17, 2026

Part 6, Section 6.1.1 of Rev. Proc. 202618, 2026-30 I.R.B. 53 (July 20, 2026) are

amended to read as follows:

Exhibit B contains the general measurements for forms printed 2-to-a-page.

All 2-to-a-page forms are 4.5 inches in

height within the border lines.

180

Exhibit E contains the general measurements for forms printed 3-to-a-page.

All 3-to-a-page forms are 2.84 inches in

height within the border lines.

Bulletin No. 2026–34

Definition of Terms

Revenue rulings and revenue procedures

(hereinafter referred to as “rulings”) that

have an effect on previous rulings use the

following defined terms to describe the

­effect:

Amplified describes a situation where

no change is being made in a prior published position, but the prior position is

being extended to apply to a variation of

the fact situation set forth therein. Thus,

if an earlier ruling held that a principle

applied to A, and the new ruling holds that

the same principle also applies to B, the

earlier ruling is amplified. (Compare with

modified, below).

Clarified is used in those instances

where the language in a prior ruling is

being made clear because the language

has caused, or may cause, some confusion. It is not used where a position in a

prior ruling is being changed.

Distinguished describes a situation

where a ruling mentions a previously published ruling and points out an essential

difference between them.

Modified is used where the substance

of a previously published position is being

changed. Thus, if a prior ruling held that a

principle applied to A but not to B, and the

new ruling holds that it applies to both A

and B, the prior ruling is modified because

it corrects a published position. (Compare

with amplified and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.

This term is most commonly used in a ruling

that lists previously published rulings that

are obsoleted because of changes in laws or

regulations. A ruling may also be obsoleted

because the substance has been included in

regulations subsequently adopted.

Revoked describes situations where the

position in the previously published ruling

is not correct and the correct position is

being stated in a new ruling.

Superseded describes a situation where

the new ruling does nothing more than

restate the substance and situation of a

previously published ruling (or rulings).

Thus, the term is used to republish under

the 1986 Code and regulations the same

position published under the 1939 Code

and regulations. The term is also used

when it is desired to republish in a single

ruling a series of situations, names, etc.,

that were previously published over a

period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of

terms is used. For example, modified and

superseded describes a situation where the

substance of a previously published ruling

is being changed in part and is continued

without change in part and it is desired to

restate the valid portion of the previously

published ruling in a new ruling that is

self contained. In this case, the previously

published ruling is first modified and then,

as modified, is superseded.

Supplemented is used in situations in

which a list, such as a list of the names of

countries, is published in a ruling and that

list is expanded by adding further names

in subsequent rulings. After the original

ruling has been supplemented several

times, a new ruling may be published that

includes the list in the original ruling and

the additions, and supersedes all prior rulings in the series.

Suspended is used in rare situations

to show that the previous published rulings will not be applied pending some

future action such as the issuance of new

or amended regulations, the outcome of

cases in litigation, or the outcome of a

Service study.

Abbreviations

The following abbreviations in current

use and formerly used will appear in

material published in the Bulletin.

A—Individual.

Acq.—Acquiescence.

B—Individual.

BE—Beneficiary.

BK—Bank.

B.T.A.—Board of Tax Appeals.

C—Individual.

C.B.—Cumulative Bulletin.

CFR—Code of Federal Regulations.

CI—City.

COOP—Cooperative.

Ct.D.—Court Decision.

CY—County.

D—Decedent.

DC—Dummy Corporation.

DE—Donee.

Del. Order—Delegation Order.

DISC—Domestic International Sales Corporation.

DR—Donor.

E—Estate.

EE—Employee.

E.O.—Executive Order.

ER—Employer.

Bulletin No. 2026–34

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

i

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D.—Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

August 17, 2026

Numerical Finding List1

Bulletin 2026–34

Announcements:

2026-11, 2026-29 I.R.B. 49

2026-12, 2026-29 I.R.B. 50

2026-13, 2026-32 I.R.B. 173

2026-14, 2026-34 I.R.B. 180

Notices:

2026-39, 2026-27 I.R.B. 1

2026-38, 2026-28 I.R.B. 30

2026-40, 2026-28 I.R.B. 33

2026-41, 2026-29 I.R.B. 39

2026-42, 2026-29 I.R.B. 41

2026-43, 2026-29 I.R.B. 42

2026-21, 2026-30 I.R.B. 51

2026-44, 2026-32 I.R.B. 143

2026-28, 2026-34 I.R.B. 177

Revenue Procedures:

2026-25, 2026-29 I.R.B. 45

2026-18, 2026-30 I.R.B. 53

2026-26, 2026-31 I.R.B. 131

2026-32, 2026-32 I.R.B. 146

2026-28, 2026-33 I.R.B. 175

Revenue Rulings:

2026-12, 2026-28 I.R.B. 27

2026-13, 2026-32 I.R.B. 132

Treasury Decisions:

10051, 2026-31 I.R.B. 118

10052, 2026-31 I.R.B. 121

10050, 2026-32 I.R.B. 134

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2026–27 through 2026–52 is in Internal Revenue Bulletin

2025–52, dated December 21, 2025.

1

August 17, 2026

ii

Bulletin No. 2026–34

Finding List of Current Actions on

Previously Published Items1

Bulletin 2026–34

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2026–27 through 2026–52 is in Internal Revenue Bulletin

2025–52, dated December 21, 2025.

1

Bulletin No. 2026–34

iii

August 17, 2026

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

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