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April 10, 2025
Question

When adding my W2, on the “uncommon situations” screen, I checked the box for paid family leave, but nothing further was asked. Is company paid paternity leave taxable?

  • April 10, 2025
  • 1 reply
  • 0 views
I know there are state sponsored PFL (paid family leave) programs. However, I believe my 12 weeks of parental leave was paid by my company (they call it “parental benefit wage replacement” on payslips). The amounts were added to my wages on my W2. TurboTax had “paid family leave” listed as an uncommon situation during W2 entry but didn’t ask anything further when I checked the box. I’m wondering if the fact I was paid for 12 weeks off when we had a baby changes our tax situation. If the payments aren’t taxable, our refund would likely change dramatically.

1 reply

AmyC
Employee
April 10, 2025

Yes, the parental leave that you received would be taxable income.   The IRS guidance states:

  • An employee who receives state paid family leave payments must include those amounts in the employee’s gross income. 
  • An employee who receives state paid medical leave payments must include the amount attributable to the employer portion of contributions in the employee’s gross income. 
  • This latter amount also is subject both to the employer’s and employee’s shares of Social Security and Medicare taxes. 
  • The amount attributable to the employee’s portion of the contributions is excluded from the employee’s gross income, and this amount is not subject to Social Security or Medicare taxes.

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