Hello. There have been a couple of older conversations about this topic, and it was all a bit conflicting due to the ambiguous nature of it all, but WA's Paid Family & Medical Leave website has recently updated its FAQs and slightly altered its wording (see below). I am looking for advice on whether or not I should report the medical leave payments I received last year when I had surgery. I was not issued a 1099-G. The new wording makes me lean towards not reporting because it *might* not be taxable (see below). But if I don't report the income, and it's later deemed taxable, what would be the penalty for not reporting it and how would I fix it?? 😩
If I do report it:
Without a 1099-G, where and how would I report the income?
If it is later deemed nontaxable, how long would I have to amend the return to receive a refund?
From https://paidleave.wa.gov/help-center/individuals-and-families/payments/ :
"Do I have to pay taxes on Paid Leave benefits?"
"Unfortunately, we don’t know whether the IRS will consider your Paid Leave benefits “taxable income.” We asked them to tell us so that we could provide customers with the right information, but they declined our request. We understand that puts customers in a confusing situation and we’re sorry. But without specific guidance from the IRS, we can’t provide more information or detail to you. Our best and only recommendation is that you consult a tax professional for advice."
"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."
"Will everyone who received Paid Leave benefits in 2022 get a 1099-G?"
"No. We only issued 1099-G forms to customers who received family leave benefits in 2022. Family leave includes leave to bond with a new child born or placed in your home and leave to care for a family member with a serious health condition. If you received both family and medical leave in 2022, your 1099-G will only include the family leave portion."
Thank you!!
