When PFL is administered by an employer's voluntary plan disability insurance (VPDI) it is sometimes reported to you on a separate W-2 and is included in your federal wages. On the federal W-2 entry screen there is a question where you can indicate this is a PFL W-2. TT/Calif will then subtract that federal wage amount from your Calif income but you can enter a different amount if only some of it is qualified PFL from the VPDI provider. If the PFL has been comingled with W-2 Box 1 wages paid by the employer then expect the Calif FTB to deny the exclusion and be prepared to prove to the FTB the PFL exclusion you are entitled to take.
PFL paid by the employer is not excludable - it must be paid from the Calif SDI program or the employer's voluntary plan (VPDI) to be excluded from Calif income.
