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Set up and manage Maine Paid Family Leave

by Intuit•43• Updated 3 weeks ago

The state of Maine has implemented a new Paid Family and Medical Leave program that takes full effect on January 1, 2026. Payroll contributions to the program will begin on January 1, 2025.  With QuickBooks Payroll, you can set up this insurance for your covered employees. If you have full service payroll, we'll pay and file this tax for you. To learn more about paid family medical leave, see Maine Paid Family Leave.

How Maine Paid Family and Medical Leave works

  • Employers with employees working in ME are subject to the tax.
  • Employers with less than 15 employees are exempt from the employer share but must withhold a 0.5% contribution rate from employees. The employer can pay this or deduct it from the employees’ wages.
  • Employers with 15 or more employees are subject to a 1% contribution rate.  Employers and employees can share the costs, which means employers will pay 0.5% of the contribution, and employees will pay 0.5%.
  • Employee count and contribution rates for the following tax year are reported on the Quarter 3 Maine Paid Family Leave Quarterly Wage Report.
  • You must add your future policy by Oct 1 to have your return reflect the correct employee count selection.

Add Maine Paid Family and Medical Leave to employees

Note: Not sure which payroll service you have? Here's how to find your payroll service.

Step 1: Add your policy

  1. Go to Settings âš™, and select Payroll settings.
  2. From Maine Tax, select Edit ✎.
  3. Under Maine Paid Family and Medical Leave Tax (PFML) Leave select Start.
  4. Select your coverage type and enter your Maine PFML account number.
  5. Select Define Rates.
  6. Enter your Policy Name.
  7. Select the effective start date of the policy. 
  8. Enter the percentages for you and your employees.
    1. If you have less than 15 employees, you will only be able to enter a total of 50% for both employee & employer. If as an employer you are funding the program entirely, enter 50% in the Employer field. If you are not funding the program, enter 50% in the employee field.
    2. If you have over 15 employees and are funding the program entirely, enter 100%. If you are splitting the cost with your employees, enter 50% for both employee and employer fields.
  9. Select Save.
  10. Select Save, then Done.

Step 2: Add the policy to your employees

  1. Go to All apps A bunch of numbers and letters on a tile wall., then Payroll, then Employees (Take me there).
  2. Select your employee.
  3. From Tax withholding, select Edit.
  4. From State withholding, select + Assign policy.
  5. Select the policy name you set up in Step 1.
  6. Select Save, then Done.
  7. Repeat steps 2-6 for all other Maine employees.

Step 1: Get the latest payroll update 

Download and install the latest payroll update. 

The Add Item Wizard for the new ME PFML pay items will launch when you pay your employees or add any new Maine employees.  

Note: Although new ME PFML items will appear on paychecks in 2024, no tax will be deducted until January 1, 2025.

Important: The Add Item Wizard will prompt you to enter the employer and employee tax rates. Potential scenarios to be aware of:

  • If as the employer, you are funding the program entirely, enter 1% and 0% for your employees 
  • If you want to split the cost with your employees, enter a percentage between 0.1% and 0.5% for their portion of the tax. 
  • If you're exempt from any portion of the program (due to employee count or private plan), enter 0%. 

Step 2: Edit the new ME PFML tax items (if needed)

  1. Go to Employees and select Employee Center.
  2. Double-click your employee.
  3. Select Payroll Info.
  4. Click on Taxes, then the Other tab. Look for and review the new ME PFML pay items. 

Edit or delete Maine Paid Family and Medical Leave

Edit your policy

  1. Go to Settings âš™, and select Payroll settings.
  2. From Maine tax, select Edit ✎.
  3. Under Maine Paid Family and Medical Leave Tax (PFML), select Edit next to the policy you want to edit. 
  4. Edit the rate, then select Save.
  5. Select Save, then Done.

Please note: If updating a policy to a retroactive date, past employee withholding cannot be adjusted. 

Remove policy from your employee

  1. Go to All apps A bunch of numbers and letters on a tile wall., then Payroll, then Employees (Take me there).
  2. Select your employee.
  3. From Tax withholding, select Edit.
  4. From State withholding, look for the policy then select Unassign.
  5. Select Unassign to confirm action.

Enter or change the tax rate for each employee

  1. Go to Employees, and select the Employee Center.
  2. Double-click the employee's name to open the Edit Employee window.
  3. Select the Payroll Info tab and select Taxes.
  4. In the Taxes screen that pops up, select the Other tab.
  5. Make sure the Maine Paid Family Leave items are there.
  6. Select the tax to change the rate.
  7. Select OK, then Save & Close.
  8. Repeat steps 2 - 7 for each covered employee.

Delete ME PFML item from your employee’s profile

  1. Go to Employees, and select the Employee Center.
  2. Double-click your employee’s name.
  3. Select Payroll Info, then Taxes.
  4. Select the Other tab.
  5. Select the DE Paid Family Leave items you want to delete (Family Caregiving, Medical, and Parental). You will need to delete both employee and employer portions to completely remove the tax.
  6. Select OK, then Save & Close.

Exempt employees from Maine Paid Family and Medical Leave

  1. Go to All apps A bunch of numbers and letters on a tile wall., then Payroll, then Employees (Take me there).
  2. Select your employee.
  3. From Tax withholding, select Edit.
  4. From State withholding, under Maine Paid Family and Medical Leave, select [Employee] is exempt from this contribution.
  5. Select Save.
  1. Go to Employees and select Employee Center.
  2. Double-click the employee’s name.
  3. Select Payroll Info, then Taxes.
  4. Select the Other tab.
  5. In the Item Name, select the ME - Paid Family & Medical Leave items, then Delete.
  6. Select OK twice.
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