This new ruling by the IRS (RR-25-04) seems to suggest that PFL benefits are reported on gross income but are non-taxable and should be treated as Medicare or Social Security benefits.
Here is a quote from the ruling:
"Although the entire $19,200 that State X pays to Employee B as family leave benefits is included in Employee B's gross income for Federal income tax purposes, it does not constitute wages for Federal employment tax purposes under $$ 3121(a), 3306(b), and 3401(a), and is neither sick pay, as defined in § 3402(0), nor a disability leave benefit payment like those described in Rev. Rul. 72-191.
Rather, family leave benefits are more closely analogous to social security benefits partially included in gross income under § 86 but not considered to have been paid as remuneration from employment, and therefore are not considered wages for Federal employment tax purposes under $$ 3121(a), 3306(b), and 3401(a)."
1. Is this saying that PFL will not be taxable?
2. And can this ruling be applied when filing my 2024 taxes?
3. Can a 1099 MISC form be filed as a 1099 G since Paid Family Leave is not really an independent contractor payment but rather a benefit?
