Thank you! Let's dig deeper because this is more complicated in reality.
The entire amount is employee paid and therefore sounds like it is not taxable. However,
- CT PFL is not the same as FMLA. The CT PFL is considered to be like short and long term disability payments, which are considered by the IRS to be taxable wages subject to FICA.
- See CT Frequently Asked Questions
- While you are there, scroll on down to the tax section. It states: the CT Paid Leave Authority has directed its claims administrator to issue 1099-Gs to everyone who received benefits from the program, regardless of the claim reason. These 1099-Gs will be issued at the beginning of the new year for benefits paid in the prior year.
This has become a gray area with CT unable to make a tax determination.
Let's go back to the IRS. Life insurance & disability insurance proceeds states: You must include in your income sick pay from any of the following:
- A welfare fund
- A state sickness or disability fund
- An association of employers or employees
- An insurance company, if your employer paid for the plan
Which means currently, it is taxable and that could change due to the employee funding. I recommend filing the income and watching to see if you can amend for a refund later.
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