California Paid Family Leave vs. Company Paternity Leave

[sephghast]

Last year I received an amount from California's official Paid Family Leave system along with money from my Company as "Paternity Leave" that was on top of the CA PFL.  I understand that the California PFL is not taxable by the state, but does the same apply to the Paternity leave pay that was supplied by the company separately?

[KathrynG3]

Yes. Paternity Leave in California, is also considered Paid Family Leave. The most recent available Form 540 Booklet, page 43, excludes the Paid Family Leave from the State of California. Enter Form W-2 in the Wages & Income interview in the Federal section.

To enter Paid Family Leave specifically, do a search for 1099-G and use the Jump to link in the search results or scroll down in the Wages & Income section to Unemployment. Click Show More and Start. Enter Form 1099-G.

See this article for more details: Where do I report a 1099-G for unemployment or paid family leave?

Congratulations!

[sephghast]

A clarification, I didn’t receive a 1099-G. My last pay stub indicates how much of my salary was paid leave, and my paternity leave counselor says only about 1/2 of it came via the CA State PFL system. The rest was paid by the company as part of their paternity policy. They top up the CA PFL to make sure we get 100% of our pay for 10 weeks. So I should still be able to deduct the amount that’s indicated as paid leave, correct?

[JotikaT2]

It depends.

Did your employer report it in Box 16 of your W-2 form?  Box 16 is used to report the amount of state wages. 

If so, then the amount paid by your employer is considered taxable within California as taxable fringe benefits.  

When you enter in the amounts as reported on your W-2 Forms, you will be reporting everything that is considered taxable within California.

Please see the attached link for more information.

California Paid Family Leave

Also as a side note, do not use your latest paystub to enter your earnings into TurboTax.  Instead, be sure to use your W-2 form as issued by your employer.  These amounts are reported to the taxing agencies and are used to reconcile the amounts you report on your income tax return.  If these amounts do not match, your return may take longer to process as the taxing agencies will need to ensure everything is reported accurately on your income tax return.