Working on my sons return. He works for Electric Boat in CT and his 2024 W2 shows that they withheld 0.5% of his social security wages to CT PFL. This indicates to me after tax payment. He received a 1099G from the Continental American Insurance Company DBA Aflac Group for $6,213 reported in Box 1 “Unemployment Compensation” which was actually for medical leave paid due to a temporary illness. Originally, he assumed that it would be taxable so he had them withhold federal and state tax.
On January 15, 2025 the IRS provided guidance on this topic Rev. Rul. 2025-4.
https://www.irs.gov/newsroom/irs-issues-guidance-for-the-district-of-columbia-and-states-that-have-p...
“An employee who receives state paid medical leave payments must include the amount attributable to the employer portion of contributions in the employee’s gross income. This latter amount also is subject both to the employer’s and employee’s shares of Social Security and Medicare taxes. The amount attributable to the employee’s portion of the contributions is excluded from the employee’s gross income, and this amount is not subject to Social Security or Medicare taxes.”
This indicates to me that since the premiums were withheld from his pay after tax and since the reason for his leave was medical hat he should not include this 1099G in his income.
When entering the 1099G there is a question “Is this paid family leave or state disability insurance payment”. I selected yes as state disability insurance payment but it still includes it as income.
Questions:
- Is there a way to identify the CT Medical leave amount as medical leave payment and have it excluded from income? If I enter the $6,213 in 1099G box 1 “Unemployment Compensation” and the federal and state withholding amounts there is no way that I can find in turbo tax to flag it as non-taxable medical leave.
- Is there some other way to enter the 1099G for the purpose of getting the withheld federal and state taxes back without turbo tax recognizing the $6,213 of medical leave payment as income?
