How do I answer questions when entering 1099-MISC for Oregon Paid Leave Program

[AnnetteB6]

To clarify so that someone will be able to help you, can you share what questions you are seeing on the screen that you need help to understand?  Also, are you seeing these questions as you work through the Federal return or the Oregon return?

[1dkschwinn]

Business name and code number can not find it on the 1099MSC? Where is it?

[Cynthiad66]

You may be reporting it and it is coming up as a business for you.  This has to reported as other income.

Payments received from Oregon Paid Leave Program is taxable as other income.  

The paid leave qualifies as unearned income. To report the 1099-MISC follow the steps below:

1. Open TurboTax.
2. "Pick up where I left off."
3. Federal > Wages & Income > " Less Common Income" > Miscellaneous Income, 1099-A 1099-C > Start or Revisit.
4. "Other reportable income" > Revisit.
5. On the screen below, select "Yes."

[larlar777]

This page specifically says not to enter income reported on a 1099-MISC and doesn't have an option to add in tax deductions made. Should it still be reported here? 

[AmyC]

Follow these steps to enter the income and then enter the tax paid"

First enter the income:
1. Go to the federal income section
2. scroll to the bottom
3. Miscellaneous Income, 1099-A, 1099-C, Start
4. Other income not already reported on a W2 or 1099, Start
5. Other wages? Yes
6. Household employee? Continue
7. Sick pay, continue, Medicaid, continue
8. Other Earned Income? Select Yes, continue
9. Source of income? Select Other
10. Enter description - OR PFL 1099
11. Continue

Enter the tax paid:

1. Go to the federal deductions and credits section

2. Scroll down to estimates and other taxes paid

3. Select Other Income Taxes, start

4. Scroll down to Other Income Taxes Paid in 2023

5. Select Withholding not already entered on a W-2 or 1099, start

6. Select yes

7. Enter amounts and information in appropriate boxes

8. Continue

@larlar777 

[JoMas59]

Thank you for this information!   I was so frustrated as it was even into "self-employment tax".... I'm not self-employed!   You saved me from going bonkers!   🙂

[MoMoneyMoMoneyMoMoney]

IRS Pub 525 says if I paid premiums on an accident or health insurance policy the benefits are NOT taxable.
Oregon FMLA Medical leave benefits fall into this category according to Oregon Dept of Revenue.  

I received a 1099-MISC with $$ in box 3 for Other Income and box 4 for Fed Income Tax withheld.  

How do I report the withheld $ and not report the box 3 income as taxable?

[DianeW777]

Yes, Oregon employees contribute to Paid Leave Oregon through payroll deductions, paying 60% of the total 1% contribution rate of their gross wages, up to a maximum wage of $168,600 in 2024.

• Oregon Paid Leave FAQs
• Oregon Memo for Taxability of Benefits

Based on this information, you must determine if you actually paid into this plan with an amount higher than the amount you actually received. If you used up all of your premiums paid, then you would report the balance. This is something you would calculate from your pay stubs (year to date payments for your last pay stub in 2024 should provide the amount paid in 2024 in full).

Report the income using your 1099-MISC, including the federal withholding.  Once you have calculated the amount that would be tax free based on the premiums you paid, you can subtract that from your income using the steps below. Watch the questions below for assistance:

It's important for you to select 'None of these apply" and then you should also select the following:

'No' on the screen 'Did the '____' involve work that's like your main job?'

'No' on the screen 'Did the '____'  involve an intent to earn money?'

This will report the income without any business activity and it will show up on Form 1040, Line 8 (From Schedule 1, Line 8z).

Other Miscellaneous Income:

1. Sign into your TurboTax Online account
2. Go to Tax Home (left panel)  Wages and Income  section
3. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
4. Select Other reportable Income > Enter a description (----) and the amount as a negative (-50 as example)

@MoMoneyMoMoneyMoMoney 

[MoMoneyMoMoneyMoMoney]

Thank you @DianeW777

I am looking at the section of the letter you attached where it says:

”Medical leave benefits are taxable based on the ratio of employer contributions to total

employer and employee contributions.”

Since I made 100% of those contributions, the ratio would be 0/100 which would be 0.

So I am reading that my MEDICAL LEAVE benefits would not be taxable. There is no mention of any limitation referencing the amount I contributed in the case of Medical Leave benefits which seems to differentiate them from other Leave benefits ie Family leave.

[DianeW777]

No, not exactly. You do pay 100% of the required rate of contributions. Only you will know if the accumulative total of all of your payments in contributions are as much as you received in OR Paid Family Leave.

Depending on the total wages you earned the formula might be something like this:

• Paying 60% of the total 1% contribution rate of their gross wages, up to a maximum wage of $168,600 in 2024.
  • .60 x .001 x your wage = total amount of premiums you paid.
  • As an example: if wages were $50,000 your contributions paid would be $30.00 for 2024.
  • If you actually used up any amount because you had OR Paid Family Leave in another year, that would also be a factor.
• Based on the information above, you must determine if you actually paid into this plan an amount higher than the amount you actually received. After subtracting your premiums paid, then you would report the balance.

@MoMoneyMoMoneyMoMoney 

[JoMas59]

So as a fulltime employee, out for medical reason, I received Company pay plus this Oregon Paid Leave (not much).     I will review the options I chose as it really messed up my "normal" taxes....

[MoMoneyMoMoneyMoMoney]

Thank you for your experience in this matter @DianeW777,

I am understanding you to say that all of the benefit received from the Paid Leave Oregon program is Taxable subject to offset by any premiums paid.

And that offset is determined by the ratio of my contributions to my employer's contributions.

I read:

Medical leave benefits are taxable based on the ratio of employer contributions to total
employer and employee contributions.

I read this as     (Medical Benefits Received)*(my contributions/employercontributions)=taxable amount

I don't see how there is an offset of contributions but rather a reference to the employee/employer contribution ratio.  Could you point out what you are referencing. 

Thank you.

[AmyC]

Yes the ratio you describe is correct but your interpretation is off. You state: I read:

Medical leave benefits are taxable based on the ratio of employer contributions to total employer and employee contributions.

Now, let's put that into action. Benefits are $20,000 (to keep this easy) times employer contribution of 40% / total of 100% (employee and employer). $20,000 has 40% taxable = $8,000. 

The question is, does your form show only the taxable amount or the full amount? Only the taxable portion should be taxed. Some places issue the forms with the correct taxable amount; but, not all.

OR allows employers to pay for the employee share so it could be up to 100% taxable to you. See Paid Leave Oregon. It could be that you paid your full 60% and only 40% is taxable.

You will need to determine the percentage you paid, if the form shows the full amount or the taxable amount, and make the correct entry.

@MoMoneyMoMoneyMoMoney 

[MoMoneyMoMoneyMoMoney]

Thank you Amy!

Very good point about what was on the 1099-MISC:   Total Income or Taxable Income?

I just double checked and it is the TOTAL Medical Leave Benefit that I received from Paid Leave Oregon (Including the Federal Tax they withheld. They withheld NO Oregon State Tax).

My interpretation of the ratio is the same as yours, but my employer paid 0% of the premiums.

so in your example : 0% / 100% = 0     and 0 x $20,000 Total Benefit= $0 Taxable benefit.

This agrees with IRS Pub. 525 under Other Compensation (as referenced by Paid Leave Oregon):

Other compensation.

Many other amounts you receive as compensation for sickness or injury aren't taxable. These include the following amounts.

• Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income.

Now the question is how to make it work in Turbo Tax.

I entered the full 1099-MISC as printed from the state of Oregon.

This shows the TOTAL benefit in Box 3 "Other Income"

If I report the total benefit on the 1099-MISC, can I then subtract out the non-taxable portion on Schedule 1/

Part II Adjustments to Income/ Line 24 z  "Other adjustments"?

This makes the most sense to me but I am unable to enter anything on that line in TurboTax.

@AmyC