Federal taxes on California paid family leave 1099-G. Can I deduct SDI payments made to California from 1099-G payment?

[user17]

This site - http://www.jeffjacobslaw.com/taxability-of-california-paid-family-leave-pfl-benefits/ says I can deduct CA SDI payments from 1099-G payment. This reduces my tax liability. Can you confirm this can be done?

[TerryA · Accepted solution]

Yes, CA SDI payments may be deducted from PFL but only if you have not taken the amount of SDI payments used to reduce your taxable PFL income as an itemized deduction. i.e. you can't use it as a deduction twice.

So, in theory, you could (somehow) add up all CA SDI amounts withheld over the years then subtract from that total all SDI amounts used as an itemized deduction over the years, and the net result is the total SDI not used as a deduction yet. That net amount may be used to offset PFL taxable income on your federal return.

[user17]

Thanks Terry

[dsmodafferi]

If a married couple is filing jointly and only one spouse received PFL income, can the couple deduct both spouses’ SDI payments or only the spouse who received PFL?

[dsmodafferi]

If a married couple is filing jointly and only one spouse received PFL income, can the couple deduct both spouses’ SDI payments or only the spouse who received PFL?

[john_742]

Hi Terry,

Thanks for the info.  However I talked with one of the TT CPAs and they did not know how to add this info.  On 1040 schedule A, the only 2 places might be line 6 or 16, but the instructions don't really fit.  Or would you add it to the SALT paid, in which case that is limited to $10k (which I am already over due to property taxes)?  Or would you modify the 1099-G directly, which I don't really want to change what is on that form?

I did the math and figured out how much CASDI taxes I paid on past non-itemized years, so this could definitely reduce my tax basis on the PFL benefits I received in 2019.  Any help is much appreciated.  Thank you!