How to identify non-taxable portion of PFL on CA return without a 1099G?

[prdeshpande]

We live and work in California. Last year my wife took maternity leave for 6 months. She received two W-2 from Sedgwick, which is her employer's agent for maternity leave management. However, she did not receive a form 1099G. The IVR system of EDD told me that it could not find any records using my identification information (SSN, DOB). How should I identify and report/treat the non-taxable portion of PFL paid to me by my employer's insurance on my CA tax return? Should it simply be $0 because I don't have a 1099G? Or should I add box-1 amount from two W-2 and put them as PFL amount in CA state filing page

[KathrynG3]

Do not adjust or add to the forms as received. Simply report the forms as received, your W-2, and her two W-2's. This should capture all reportable details for the federal and state returns in TurboTax.

You are correct that Paid Family Leave may be reported on a W-2 (from the insurance company) or on Form 1099-G from the State of California. Since you did not receive Form 1099-G, do not enter anything in the 1099-G Paid Family Leave section of TurboTax regarding Paid Family Leave.

See the link below for specifics about completing the State interview. TurboTax will guide you through the necessary reporting requirements.

For more information, see: 

Fact Sheet: California Paid pdf edd fact sheet pfl Family Leave (DE 8714CF) Rev. 21 (12-20)

What do I need to know about Paid Family Leave (PFL) in California?

[prdeshpande]

Thanks for your reply. 

1. So when adding each W-2 in turbotax, there is section with uncommon scenarios. So for my wife's two W-2 should I tick-mark, paid family leave option?

2. Also, when reporting California taxes, they ask paid family leave dollar amount to be exempted from state taxes. What amount should I enter there? If I do point 1 above then Turbotax will automatically add box1 amount from two W-2. Should I make it zero or keep it as it is ?

[ReneeM7122]

Correct, you should check the Paid Family Leave box in the Uncommon Scenarios area for your wife's W-2.   You should enter the Box 1 amount exactly as it appears on your form without changing it.  The information is being transferred to the IRS and your tax return should match.

[newton_issac]

The first answer to this post was entirely the opposite of this. I am in the same situation and super confused

[BillM223]

As noted above the Paid Family Leave can be reported on a 1099-G sent by the CA EDD or on a W-2 paid but the employer's insurance company.

In the W-2 interview, when you check that this is PFL, I don't believe that TurboTax knows which W-2 is being referred to. Hence, in this case, when you get to the CA interview, TurboTax has to ask for "PFL Income Received from Insurance Company" (which is not taxable in CA).

Unfortunately, the TurboTax interview pre-fills the PFL box with the sum of all the W-2s that apply to that taxpayer, which caused many taxpayers to just hit Enter on the assumption that TurboTax knew what it was doing (The taxpayers really should have read the instructions on the screen more carefully). Thus, these taxpayers who had W-2s that were not PFL wages overstated their CA state income, and they got letters from the state 4 (!) years later.

So, to be clear, on the screen in the CA interview headed, "Paid Family Leave (PFL) Income in California", enter the amount in Box 1 on the W-2 from the insurance company that pays PFL for your employer (if any). This amount will be subtracted from state income.

So, don't be confused. If this is not clear yet, just come back and ask again...

[newton_issac]

Thanks for providing this information. This is my situation -

I received one W2 from Lincoln Financial for my paternity leave while my wife received two W2 from Sedgwick for her maternity leave. How do we know by looking at the W2 that I need to check the "Paid Family Leave" checkbox for the W2 ?

I see that the Lincoln Financial W2 has a different value in Box 1 and Box 16 (state wages). Looks like the W2 is already reporting less wages for the state by making any adjustment for state tax purposes. There is no information in box 14

Two W2 from Sedgwik. One has only Box 1 and no Box 16 (state) is 0 with CAPL entry in box 14. The other W2 has the same numbers in Box1 and Box 16 with no data in box 14

My confusion -

1. Should I check the "paid family leave" checkbox for these 3 W2s since I and my wife were on paternity/maternity? 

2. If we do check the box then what amount to enter in the Paid Family Leave for California Box

3. Or should I import these 3 W2s as regular W2 and file my taxes assuming our insurance companies did all the PFL adjustments which generating the W2

[BillM223]

In reading your previous post, I assumed that Sedgwik was the payer of the PFL for your employer. I would encourage you to call your employers and ask them who the PFL insurance company is/are  (Lincoln Financial? Sedgwik? Somebody else? Your employer's HR should know).

If, however, you actually work for Lincoln Financial or Sedgwik, and the W-2 is for your employment, then you should ignore these W-2s for adding the Box 1 amounts. NOTE: What is called "Paid Family Leave" that is actually paid by your employer and so appears on your employee W-2 does NOT count as PFL under CA law that is excluded from CA state income, so do NOT add this in to the box on that screen.

"How do we know by looking at the W2 that I need to check the "Paid Family Leave" checkbox for the W2 ?" - You don't, ask your employer.

"Box 14" - Entries are put by your employer into box 14 to tell you something. We don't know what that something is. Again, ask your employer.

"1. Should I check the "paid family leave" checkbox for these 3 W2s since I and my wife were on paternity/maternity? " - No, check it ONLY for the W-2s that your employers identify as PFL FROM THE EMPLOYER'S INSURANCE COMPANY.

"2. If we do check the box then what amount to enter in the Paid Family Leave for California Box" - As noted above, the amount to enter in the PFL box in the California interview is the sum of the qualifying PFL from your employer's insurance company. You have to ask your employer.

"3. Or should I import these 3 W2s as regular W2 and file my taxes assuming our insurance companies did all the PFL adjustments which generating the W2" NO!!!!!. Do your homework and sit down with your employer(s) and ask them which W-2s were from the insurance companies.

[newton_issac]

Thank you for such a detailed response. I think I know what to do now. Please let me know If I am going in the right direction

My wife and I together have 5 W2

1st w2 - Employer A for myself - Import as is

2nd w2 - Lincoln Financial (Insurance company handling my paternity) - Import with "Paid Family leave" checked

3rd w2 - Employer B for my wife

4th and 5th W2 - Sedgwik (Insurance company handling my wife's maternity) -    Import with "Paid Family leave" checked

Now, I need to contact the insurance companies to get the PFL amount. And the sum total of the PFL amount I should enter in the Paid Family Leave for California Box while working on my state tax return.

Is there any other way to find out the PFL amount paid by the insurance company? Maybe the sum total of the differences between Box 1 and Box 16 of the three insurance company issues W2 ?

[BillM223]

Off hand, I don't know why the Box 1 and Box 16 amounts would be different in this case. Box 16 is the state wages that the payer thinks is right under CA law. For example, contributions to an HSA are not deductible in CA, so the Box 16 amount is equal to the Box 1 amount plus the HSA contributions. 

Since Lincoln Financial appears to have paid you only PFL, I don't know why Box 1 would be different from Box 16. Ask them. Also, did you receive any checks from these guys that you can check against these forms?

As for Sedgwik, I am concerned that they sent you duplicate W-2s. Yes, they look different, but are the numbers in Box 1 the same on both W-2s? Again, did they send you a check that you can "check" against?

[mulleryi]

Hi BillM223,

I am also confused about filing CA PFL, could you please help?  Much appreciated!

I have received 1099-G from EDD, and the only W-2 that I received is from my employer.  I'd greatly appreciate if you could let me know how to figure out if any of my PFL income came from an insurance company.  

It appears to me that if I have received PFL income from an insurance company, it should be reported on a W-2.  Is the PFL income from the insurance company reported on a separate W-2, or is the PFL income from the insurance company reported on the same W-2 from my employer? 

a. If the PFL income from the insurance company is reported on the same W-2 from my employer, could you please let me know which box shall I be looking at to figure out the amount of PFL income from the insurance company? 

b. If the PFL income from the insurance company is reported on a separate W-2 from an insurance company,  since the only W-2 that I received came from my employer, does that mean that none of my PFL income came from an insurance company?

I'd appreciate even if I need to reach out to HR or payroll department to figure out if any of my PFL income came from an insurance company, although I am hoping I can figure it out from the W-2 form and 1099-G form that I have received.

Thanks a lot!

[BillM223]

The EDD sent you your PFL. If there had been an insurance company involved, they would have sent you a separate W-2 from your employer. So, yes, none of your PFL came from an insurance company. All of it came from the California Employment Development Department.

So in the screen above that says "Paid Family Leave in California", you will put zero in the box, because none of the W-2 income was PFL.

The 1099-G amount is what you enter as Unemployment under Wages & Income. The first thing you are asked is, were you paid for unemployment or paid family leave. This tells you that you are in the right place. 

The 1099-G amount will be added to your federal income but should not appear as CA income.