You may need to adjust the federal first due to a new ruling in January.
Benefits from Paid Leave are taxable according to the percentage paid by the employer. Your w2 should not include the portion you paid for federal or state. The IRS announced it in January and the forms may have already been created, with the full amount. See The IRS guidance.
Your employer paid the 40%. You state that you had money withheld and paid 60 % -that part of the amount is not taxable.
You may need a corrected w2. If you can't get a corrected w2, you will need to subtract the 60% you paid.
The same is true for OR taxability. See Paid Leave Taxability. OR starts with the federal AGI so another adjustment is not needed.
Follow these steps to enter the nontaxable income on your federal return:
- go to the federal income section
- scroll to the bottom
- Miscellaneous Income, 1099-A, 1099-C, Start
- Scroll to the bottom
- Other reportable income, Start
- Other taxable income?
- Select YES
- Description - nontaxable employee paid share of OR PFL
- Amount, enter your amount with a negative sign in front
- Continue
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