On December 16, 2022, the Oregon Department of Revenue published much anticipated tax information related to Paid Leave Oregon (PLO) contributions and benefit payments. Here is a summary of the information provided:
Contributions
- PLO contributions are post-tax and are included in wages subject to Oregon income tax withholding
- PLO contributions paid by the employee should be reported in box 14 of the W-2
- Any employer-elected payments of the employee’s portion of the contribution responsibility are considered taxable wages to the employee
- PLO contributions are not allowed as an Oregon itemized deduction
Benefits
Benefits received from PLO program generally are taxable income:
- Family leave benefits are fully taxable
- Safe leave benefits are fully taxable
- Medical leave benefits are taxable based on the ratio of employer contributions to total employer and employee contributions
- Assistance grants received from the PLO program are generally taxable
The letter also stated that any guidance provided by the Oregon Department of Revenue may be superseded by guidance issued by the IRS, when it provides an opinion on these issues. As of December 16, the IRS has not provided guidance.
We encourage you to visit our Paid Leave Oregon Resource Center for more information and FAQs.