Reading the documents from the Colorado Supreme Court at https://www.courts.state.co.us/userfiles/file/Court_Probation/Supreme_Court/initiatives/2019-2020/20... indicates that the CO FAMLI withholdings are considered taxes by the IRS and are thus deductible. Colorado defines them as fees to get around TABOR. Colorado governor Jared Polis has requested that the IRS clarify this issue...
Here's the paragraph clarifying this:
The Internal Revenue Service (the "I.R.S.") has determined that mandatory payroll deductions levied by the State of California to finance its Family Temporary Disability Insurance program are payroll taxes which may be deducted from federal taxable income under Section 164 of the Internal Revenue Code. SeeMemorandum, Office of Chief Counsel Number [removed] (July 28, 2006) (a copy is attached hereto). The I.R.S. based its determination that payroll deductions for such state- mandated "insurance" are taxes because they are mandatory and "imposed and collected for the purpose of raising revenue to be used for a governmental function that serves public purposes, namely, to allow individuals to take time off from work to care for a seriously ill child, parent, or domestic partner; or to bond with a new child." Id. The I.R.S. characterization of California's program matches almost perfectly the measure's proposed program for Colorado.
