I received a 1099-MISC from the company that paid my Maternity leave benefits. Should it have been reported on a 1099-G?

[ColeenD3]

No, it can be reported on 1099-MISC.

Under Wages and Income, scroll down to Income from 1099-MISC.

• Enter the 1099-MISC exactly as printed, and then Continue.
• Enter paid family leave under "Other".
• Describe the reason for this 1099-MISC: Maternity leave
• Select None of these apply, then Continue.
• Select No, it didn’t involve work….. and Continue.

Select ONLY the tax year for which this specific 1099-MISC was issued. Do not select the year that you received the 1099. Select the year for which the 1099-MISC was issued. Select no other year. Then Continue.

• Select No, it didn’t involve an intent to earn money, then Continue.
• Select NO, then Continue.

Click the DONE button, and that does it.

[McCartF]

I'm in the same situation and handled it exactly as you described above. The 1099-MISC was issued from a payroll service in AZ but under recipient's (mine) name it also shows CA PFL.  Because it is delineated as CA PFL, does that mean that it is not taxable on my California state tax return? How to input this on my CA TurboTax form?  I am working remotely in MA for a CA company which employs me out of its San Francisco office which means I must pay CA taxes as a non-resident. I also have to file a MA resident return and from what I  can figure out Paid Family Leave is taxable in MA.  AM I right?

[RobertB4444]

@McCartF  You are correct.  California Paid Family Leave payments are not taxable in California.  

You will enter your 1099-MISC just as @ColeenD3 instructs above.  Then you will create your California non-resident return BEFORE you create your Massachusetts resident return.  That will cause the California return to ask you to adjust your income to show what is taxable in California.  You will exclude the income from this 1099-MISC.  

Unfortunately, you are also correct that the paid family leave benefits are taxable on your Massachusetts return. 

[McCartF]

Thank you very much RobertB4444 for your help on this.  Am I correct that it is taxable on the Federal return, too?

[FangxiaL]

Yes, you are correct. It is taxable income on the federal return. 

@McCartF

[kula009]

Hello, I followed the exactly same steps, but found that it resulted in state tax increase. How do I avoid the state tax as the PFL is exempt from CA tax? I'm a CA resident. Thanks in advance?

[DianeW777]

The subtraction adjustment is made on the California (CA) return using Schedule CA-540. If you have completed your CA return and did not enter an adjustment you can make this adjustment by selecting 'Other Adjustments to Income' under Miscellaneous (because it was not part of your W-2 wages). 

• Enter your description - Paid Family Leave > Enter your amount in the 'Subtraction' column
• See the image below for assistance.

@kula009