Colorado FAMLI benefit and new IRs RR 25-04 guidance on federal taxes for 1099 G

[hernluis]

Any body have any insight on how they are doing their federal taxes for colorado's new FAMLI benefits (paid family leave) and 1099g form. I know that starting jan 2025, 10% federal deduction applies to the benefits, its unclear what applies to those whom received benefits in 2024. When i put it into turbo tax its taking my full tax bracket deduction of 22%. The famli website states that I may not have to submit for federal taxes since its unclear how federal taxes will apply. The new IRS guidance RR25-04 also states I may not need to submit for federal taxe, page 20 at the bottom. https://www.irs.gov/pub/irs-drop/rr-25-04.pdf

No body seems to know about the rr 25-04 guidance.  Turbo tax specialist say submit like any 1099g form but they are all out of state and dont know about rr 25-04.

[MaryK4]

Because employees pay half of the premiums, one-half of the income is taxable income.  Because the 1099-G is the total you received, you can an adjustment under Miscellaneous Income.

When you get to the Colorado state section, you will have to make sure you make the right adjustment to exclude the one half amount as on the federal return (do not add another adjustment.)

Under Less Common Income select Miscellaneous Income, 1099-A, 1099-C
On the Let's Work on Any Miscellaneous Income page, select Start to the right of Other reportable income
On the Any Other Taxable Income? screen, select Yes
On the Other Taxable Income screen enter the description "Adjustment for Colorado FAMLI," then one half as a negative.  Select Continue
On the Other Miscellaneous Income Summary screen, select Done

[hernluis]

why doesnt turbo tax do this automatically? lets say we received 20K, i would enter -10k on the state correct?

[RobertB4444]

Using those numbers that is correct.  One half as a negative number.

This is a new tax law.  Hopefully it will be automated for next year.

@hernluis 

[hernluis]

Im having a hard time finding where to put this info on the online computer app. In one location it wound let me put in a negative number. when i add as a deduction it doe not show up as a negative number on the actual state tax form when i preview it. There is a FAMLI option on the state form, it adds the full number as a positive on line 22 of the actual state tax form. Any thoughts?

[AmyC]

Yes, line 22 of the SUBTRACTIONS form. All subtractions to income are totaled on line 25 and transferred to the tax form DR 104.

Great job!