When entering 1099-G received from MA Dept of Family and Medical Leave for Paid Family Leave benefits, should I reduce the amount in Box 1 by PFML contributions I made?

[jeremyderman]

I received Paid Family Leave benefits in TY 2024 directly from MA Dept of Family and Medical Leave, and received a 1099-G showing the full amount of those benefits. I contributed to the MA Paid Family Leave plan that provided for these benefits through regular payroll deductions by my employer. The amount of these employee plan contributions is correctly listed on my employer W-2. The instructions for Box 1 on 1099-G state "You only need to include in income the amount that is in excess of your contributions." Also, the instructions to Schedule 1, Line 7 of Form 1040, state "If you made contributions ... to a governmental paid family leave program and you aren't itemizing deductions, reduce the amount you report on line 7 by those contributions." Am I able to reduce the amount of the PFML benefits includible in taxable income by the PFML plan contributions I made during the same tax year? If yes, what is the best way to do this in Turbo Tax?

[AmyC]

1. You should reduce the gross amount by your employee portion of the income. It looks like the employee share is 18% of the premium which means 18% not taxable to you. See contribution calculator.

2. Simply subtract your portion from the gross amount and enter that as the taxable amount.

The IRS issued new guidance in Jan. The IRS guidance states:

• An employee who receives state paid family leave payments must include those amounts in the employee’s gross income. 
• 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.