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April 15, 2023
Question

How do I enter medical leave pay without a 1099g? On the WA gov website it states: " If you only received medical leave benefits, we did not send a 1099-G to you."

  • April 15, 2023
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April 18, 2023

According to Washington state, medical leave benefits are not taxable.

 

From Washington Paid Family & Medical Leave webpage: 

 

Why did Paid Leave provide 1099s for family leave but not medical leave benefits?

 

While the IRS declined to give us guidance on the taxability of Paid Leave benefits in Washington, based on what we’ve learned from other states with similar programs, we think it is likely that family leave benefits could be taxable and medical leave benefits would not. That is why we chose to provide 1099s for family leave only.

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February 7, 2025

In early 2025, the IRS came out with guidance for this sort of thing... Can anyone dumb it down for me regarding Washington State's Paid Medical Leave? 

 

Thanks!

 

https://www.irs.gov/newsroom/irs-issues-guidance-for-the-district-of-columbia-and-states-that-have-paid-family-and-medical-leave-programs

DaveF1006
February 8, 2025

Yes. Here is a summary of the IRS guidance for 2025. To summarize this:

 

  1. Family Leave Benefits: Amounts paid to employees as family leave benefits are included in the employee's gross income but are not considered wages for federal employment tax purposes.
  2. Medical Leave Benefits: Amounts paid to employees as medical leave benefits are excluded from the employee's gross income if they are attributable to the employee's contributions. If the benefits are attributable to the employer's contributions, they are included in the employee's gross income and subject to Social Security and Medicare taxes.

This follows the advice I gave in my previous answers although not in the same format as this answer.  

 

It does mention that Mandatory employee contributions to state PFML funds are treated as state income taxes and are deductible if the employee itemizes deductions, subject to the state and local tax (SALT) deduction limitation. Even though Washington does not have a state income tax requirement, these can be still be itemized on the federal return as an itemized deduction subject to the Salt Limitation.

 

IRS Guidance for 2025 for PFML

 

Rev. Rul. 2025-4 

 

@hale_me_now 

 

 

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