I received PFL income in 2020 in the state of California. I have verified with my own calculations and from reaching out to my employer that my PFL income was included in box 1 of my W2, but not in box 16 of my W2. This makes sense because PFL is taxed by the federal government, but not by the state of California. Because my PFL was paid by my employer I did not receive a 1099-G or an additional VPDI W2 identified as the only way to exclude PFL income from California taxes in this article. Note that as far as I can tell the TurboTax software completely ignores the value in box 16. Modifying box 16 to arbitrary values has no impact on California taxes in TurboTax. So the only way I can get the TurboTax software to take into account the PFL excluded from box 16 of my W2 is to 1) Fill in the check box for "Paid Family Leave" in the W2 interview section. 2) Enter the PFL amount in the "Paid Family Leave (PFL) Income in California" of the California interview section of TurboTax.
Is this a bug in TurboTax? Is there a better way to get TurboTax to recognize the PFL reduction in box 16 of my W2?
