Question

Maternity benefit - Paid family leave tax treatment for CA

Forum|Forum|5 years ago
June 8, 2020
1 reply
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I was out on maternity leave for part of 2019. In my W2, I see a line for my regular pay (7 months), paid family leave (12 weeks), and also disabilities (10 weeks). My company said I will not receive a 1099-g as it's not necessary. When filing my taxes, I checked the box in Turbotax that says "I earned all or part of this income as paid family leave", I get a much larger California state refund that equals almost all of my CA state tax for the year (including what I paid for the 7 months I worked). I understand that the family leave and disability pay is not taxed by the state, but it doesn't seem right that turbo tax removed all state taxes.

B

BillM223

In the California interview, there is a screen that asks you to enter the amount of your W-2 that was PAID BY THE INSURANCE COMPANY supplying the PFL (paid family leave) insurance benefits.

In many (most) cases, when you get a W-2 from your employer, it is not actually PFL as the state defines it.

That is, if PFL is paid to you by the EDD in California, then you receive a 1099-G. If you receive the PFL benefits from your employer's insurance company, then you will receive a separate W-2 from the insurance company.

In this latter case, you would enter the entire amount of the insurance company's Wages on this CA screen because it was all from the insurance company.

But if the W-2 is from your employer, then you would enter on that screen ONLY the amount in Box 1 (Wages) that was passed through from the insurance company.

The problem is that employers often give you short-term disability or accrued vacation or other stuff and call it "PFL", but it's not according to the state of California.

So, go to your employer and ask, "Is any of amount in Box 1 Wages on my W-2 from your insurance company and you just passed it through to me?" If the answer is "NO", then you must enter ZERO on the screen that asks how much your insurance company paid you.

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