When I say entire W2 amount I mean box 1 in W2. I did not get a 1099-G from Sedgwick. I got one W2 from my employer.
Yes, if your PFL was from your employer then it would be included in box 1 and in your California wages. There is no credit on the federal return for this. On the California return you will adjust the amount that you received for PFL based on the amount that should be shown in box 14 of your W2. If your employer did not include it in box 14 you'll need to figure out the amount on your own.
I am a bit confused here.
On my last paycheck I have CA Paid Family Leave and also Intermittent PFC.
The total of these does not add up to be the difference between W2 Box 1 (Federal) and Box 16 (State).
The difference between Box 1 and Box 16 is equal to the CA Paid Family Leave.
It does not look like Box 16 is used in any CA calculations, it is listed in line 12 of CA 540, but I don't see it used in any calculations. In TT I selected that part of my W2 is for PFL, and in the CA return I am not sure how to adjust the part that was PFL. So basically where in TT do I tell TT not to tax my PFL?
Additionally, I don't know if I should include both the CA Paid Family Leave AND the Intermittent PFC when requesting CA to exclude them from taxes.
The W2 should have the PFL removed from the California income already. That's why box 16 is lower by that amount. You should also have the PFL entered in box 14. If you have all of that taken care of then it will carry over to the state return automatically.
My Box 1 and Box 16 are exactly the same on my W-2, whereas Box 14 is way lower. Should I be putting the number for Box 1 and 16 in the space or should it be the amount in 14? I received a 1099-G form as well.
In California, Paid Family Leave (“PFL”) provides benefit payments to people who need to take time off work for certain family issues. PFL paid by the California Employment Development Department (EDD) is reported on Form 1099-G, while PFL paid through a Voluntary Plan for Disability Insurance (“VPDI”) is reported on a W-2, either through the employer or a third-party insurer. Generally, PFL is taxable on the federal return, but not taxable in California.
The amount TurboTax shows in the California interview for PFL, asking if you need to edit it, is generally because the user checked a box in completing the W-2 in the Federal section indicating that some or all of the W-2 was attributable to Paid Family Leave.
If you indicate in the Federal section that some or all of the W-2 is attributable to PFL, TurboTax displays a PFL adjustment screen in the California interview, showing the total wages from the W-2 marked by the user as containing PFL and asking the user to review and adjust the amount as needed. The screen also instructs, “Don’t include PFL income reported on a 1099-G. This will automatically be deducted from your California income.”
If you got a W-2 from an insurance company for PFL, then you do subtract it from California wages. If, however, your employer just paid regular wages in your W-2, then you don't subtract it from California wages and you should remove it from the amount in the California PFL screen.
Any PFL reported on a Form 1099-G will automatically be deducted from your California income. Don't deduct it separately on the screen where you deduct PFL from an insurance company or you will get a double deduction. Also, don't deduct regular W-2 wages as PFL.
See this California EDD webpage for more information.
California regularly audits returns for this issue.