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February 13, 2023
Question

Washington DC State Taxes, Paid Family Leave, and Married Filing Separately on Same Return

  • February 13, 2023
  • 1 reply
  • 0 views

I am completing my Washington DC "state" tax return.  We received Paid Family Leave last year from Washington DC, which comes on a 1099-G, and which the Federal return requires me to put in the Unemployment benefits/Paid family leave section.  That is appropriately included in my Federal tax return as income.

 

The way DC taxes work, you start with your income from your 1040, then you adjust it based on whether certain things are or are not taxable in DC.  Furthermore, when you are Married Filing Separately on the Same Return, you assign those adjustments to the individual tax filers.

 

However, for my DC return, TurboTax is asking me to "Allocate Subtractions Between Spouses," and is specifically listing my Unemployment Insurance Benefits.  In DC, unemployment insurance benefits are not taxed, but paid family leave is taxable income.  But the amount of benefits listed to allocate as a "subtraction" is for paid family leave, not for unemployment insurance.

 

So I'm stuck.  There should be no subtraction, because the amount received is paid family leave, not unemployment insurance.  But there's no way to tell TurboTax that this is paid family leave, and not unemployment insurance, since they're treated the same in the Federal tax return.  And I have no way of knowing this is going to do it right, because I can't see my return until after it's filed.

 

Is anybody else facing this problem?  I don't want to pay extra money for "live tax advice" only to be told that it's a coding problem on their end.

 

 

1 reply

MichaelG81
March 30, 2023

Yes, while in state of DC return after answering health coverage questions, it'll take you to "Items Taxed by DC" after going through the section and clicking "done", you will get the disability question answer as it applies to you. 

 

Finally, you will get to the DC Family Paid Leave page, if you received, enter yes, and the amount received from the form. It'll tax it and enter in to the appropriate lines on the state return. This has been updated in online and desktop versions. The page will look similar to this one:

@RussRIK 

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