QuickBooks Maryland FAMLI Payroll Setup: A Practical Guide for 2026 Maryland employers using QuickBooks Desktop Payroll should prepare their payroll records for the state's Family and Medical Leave Insurance program before contributions begin. FAMLI registration applies to employers with at least one employee working in Maryland, while payroll deductions begin January 1, 2027. QuickBooks has already added Maryland FAMLI employer and employee payroll items to its 2026 tax tables, giving businesses time to review their payroll configuration before deductions start. For businesses getting ready for the new requirement, a careful QuickBooks Maryland FAMLI payroll setup can make the transition easier.
What Is Maryland FAMLI? Maryland FAMLI is the state's Family and Medical Leave Insurance program. It is designed to provide eligible workers with paid, job-protected leave for qualifying family and medical needs. The program is being introduced in stages. Employers need to prepare before payroll deductions begin, but employees will not begin receiving FAMLI benefits until January 1,
2028. Contributions start January 1, 2027, creating a funding period before benefit payments begin. Eligible workers may eventually receive up to 12 weeks of paid leave for qualifying circumstances, including caring for themselves or a family member, welcoming a child, or certain military-related family needs. For payroll departments, the immediate concern is not processing leave claims. It is getting employee deductions, employer contributions, payroll items, and reporting information ready for 2027.
Important FAMLI Dates for Maryland Employers A few dates are particularly important when preparing payroll: ● January 1, 2027: FAMLI payroll contributions begin. ● April 2027: Employers begin submitting quarterly wage and hour reports and remitting State Plan contributions. ● April 30, 2027: The first quarterly contribution payment is due for wages paid from January through March. ● January 1, 2028: FAMLI benefits become available to eligible employees. Businesses should not wait until the first 2027 payroll to investigate the requirements. Employee records, company registration, plan selection, and payroll software can all be reviewed ahead of time.
Who Needs to Register for FAMLI? Maryland requires employers with at least one employee working in Maryland to register with FAMLI. The requirement applies even when the business has only one Maryland-based employee. Employer size is also important because it affects the State Plan contribution responsibility. FAMLI determines employer size using employees under the same federal EIN, including employees who work inside and outside Maryland. Independent contractors are not counted toward employer size. This distinction is important for businesses that have employees in several states. A company should not assume that having fewer than 15 Maryland employees automatically makes it a small employer for FAMLI purposes.
Understanding the 2027 Contribution Rate Maryland has established an initial total State Plan contribution rate of 0.9% of covered wages, subject to the Social Security wage cap, for wages paid during 2027. The rate is divided between the employer and employee, with employers generally able to withhold up to 0.45% from employees. For employers with 15 or more employees, the standard State Plan structure calls for the employer to cover its share while the employee can contribute up to the other half. Businesses with fewer than 15 employees receive a small-employer treatment under the
State Plan. They are responsible for remitting 50% of the contribution rate rather than the full employer-and-employee combined amount. That amount may be collected from employees.
A Simple Example Suppose a covered employee earns $1,000 in wages during a pay period and the applicable employee contribution is 0.45%. The employee contribution would be: $1,000 × 0.45% = $4.50 The actual payroll calculation can depend on the employee's covered wages and the employer's plan status, so the example should be treated as an illustration rather than a substitute for the state's official calculation rules.
QuickBooks Desktop Payroll and Maryland FAMLI Intuit has added two Maryland FAMLI payroll items to its 2026 tax tables: ● MD - FAMLI Co. for the employer portion ● MD - FAMLI Emp. for the employee portion QuickBooks states that these items are included in the 2026 payroll tax tables, with setup instructions for Desktop Payroll. This is useful because employers do not need to invent their own payroll tax items simply because FAMLI is a new program. Instead, the QuickBooks payroll update provides the appropriate items for the software's payroll system.
How to Prepare QuickBooks Desktop for Maryland FAMLI The setup process should begin by making sure QuickBooks Desktop Payroll is fully updated.
Step 1: Install the Latest Payroll Update Open your QuickBooks Desktop company file and go to: Employees → Get Payroll Updates Download and install the latest available payroll update. Intuit recommends checking the installed update through Employees → Get Payroll Updates → Payroll Update Info. Keeping the payroll service current is important because the FAMLI items are part of the updated tax tables.
Step 2: Allow the FAMLI Setup Wizard to Run QuickBooks Desktop's current FAMLI guidance says the Add Item Wizard launches when you pay employees or add a new Maryland employee after the appropriate payroll update has been installed. The wizard runs for the employer and employee portions and asks for the
applicable rates. Do not skip this step simply because FAMLI benefits do not begin until 2028. Payroll withholding starts in 2027, so the payroll system needs to be prepared beforehand.
Step 3: Enter the Appropriate Contribution Rates The rate entered in QuickBooks should correspond to the employer's FAMLI situation. For a State Plan employer with 15 or more employees, the employer portion is generally 0.45% and the employee portion can be up to 0.45% for 2027. For an employer with fewer than 15 employees, the employer share is 0% under the small-employer State Plan treatment, while the applicable employee-side amount can be collected as permitted by the program. Employers should confirm their status before entering rates rather than applying the same configuration to every Maryland business.
Set the FAMLI Payment Frequency Maryland FAMLI contributions under the State Plan are remitted quarterly. QuickBooks' Desktop setup guidance instructs employers to enter their account number and select Quarterly as the payment frequency. The quarterly schedule follows the calendar year: ● ● ● ●
January–March wages: payment due April 30 April–June wages: payment due July 31 July–September wages: payment due October 31 October–December wages: payment due January 31 The first payment, covering the first quarter of 2027, is due April 30, 2027.
Check FAMLI Items on Employee Records After the payroll update and initial setup, employers can review individual employee records. In QuickBooks Desktop, the path is: Employees → Employee Center → Double-click employee → Payroll Info → Taxes → Other The FAMLI items can be reviewed there. Intuit identifies MD - FAMLI Co. and MD - FAMLI Emp. as the relevant payroll items. This review is particularly useful for businesses with employees working across state lines because FAMLI coverage depends on where the employee works, not simply where the company is headquartered.
Remote Employees and Maryland FAMLI Work location is an important part of determining whether an employee is covered. QuickBooks' Maryland FAMLI guidance states that coverage is based on the employee's work location. Someone working remotely from Maryland can be covered even when the employer is based elsewhere. Conversely, an employee working from another state for a
Maryland-based company is not automatically covered simply because the company is located in Maryland. Businesses with remote teams should therefore review employee work locations rather than relying only on the company's mailing address.
State Plan vs. Private Plan Maryland employers can participate in the State Plan or pursue an approved private plan. Private plans can have different administrative and contribution arrangements, so businesses should not automatically apply State Plan settings to a private-plan arrangement. For employers planning to pursue a private plan in 2027, Maryland currently provides a Declaration of Intent process. Employers seeking to use the private-plan pathway should follow the state's specific deadlines and escrow requirements rather than treating the private plan as a simple payroll-tax change. This is an area where payroll administrators should keep documentation of their plan status and communicate the decision to whoever maintains QuickBooks.
Quarterly Reporting Is Part of the Process FAMLI compliance involves more than withholding money from employee checks. All employers must submit Quarterly Wage and Hour Reports electronically, including employers using an approved private plan. Maryland uses these reports to help determine employee eligibility and benefit amounts, and State Plan employers' reports are also used to calculate quarterly contributions and determine small-employer status. Small employers are not exempt from these reporting requirements simply because they receive a reduced contribution obligation. This means payroll records should be maintained carefully throughout each quarter so the information submitted to Maryland agrees with the company's payroll records.
Common QuickBooks FAMLI Setup Mistakes Several avoidable problems can occur when businesses prepare for a new payroll requirement.
Using an Old Payroll Update If QuickBooks has not been updated, the Maryland FAMLI payroll items may not be available or may not reflect the current configuration. Always verify the installed payroll update before troubleshooting individual employee calculations.
Applying the Same Rate to Every Business Employer size can change the State Plan contribution responsibility. A business with fewer than 15 employees does not necessarily use the same employer-side configuration as a business with 15 or more employees.
Ignoring Work Location A Maryland company can have employees working in other states, while an out-of-state company can have employees working in Maryland. Payroll setup should reflect the employee's actual covered work location.
Confusing FAMLI With Other Leave Programs FAMLI is a separate Maryland program. Employers should avoid treating its payroll items as interchangeable with other paid-leave, disability, or payroll-tax items.
A Practical Pre-2027 Checklist Before the first Maryland payroll of 2027, employers can review the following: ● ● ● ● ● ● ● ● ● ● ●
Confirm the business is registered with Maryland FAMLI. Determine whether the State Plan or an approved private plan applies. Review the company's FAMLI employer-size classification. Update QuickBooks Desktop Payroll. Confirm the MD - FAMLI Co. and MD - FAMLI Emp. items are available. Verify employee work locations. Review applicable contribution rates. Set the payment frequency to quarterly where appropriate. Confirm the FAMLI account information in QuickBooks. Prepare for quarterly wage and hour reporting. Keep documentation supporting the payroll setup. Completing these checks before deductions begin can reduce last-minute payroll changes and make the first quarter of 2027 easier to reconcile.
Final Thoughts Maryland FAMLI introduces a new payroll responsibility for employers with Maryland workers, but preparation does not have to be complicated. The key is to separate the program's different requirements: registration, plan selection, contribution rates, employee coverage, payroll deductions, and quarterly reporting. QuickBooks Desktop Payroll already includes Maryland FAMLI employer and employee payroll items in its 2026 tax tables, allowing businesses to begin preparing their payroll files ahead of the January 2027 contribution start date. Employers should continue checking official Maryland FAMLI guidance for changes and use their actual plan status and workforce information when configuring payroll. A well-documented setup can help keep employee deductions, employer contributions, and quarterly reporting aligned as Maryland's FAMLI program moves into its contribution phase.