Is Paid Family Leave (PFL) supposed to total my total income in Schedule CA?

[torres1856]

I went through TurboTax and entered all the information correctly and reviewed it several times. One box that was auto-populated was in Schedule CA (California wage, IRA and Pension Adjustments). Line 1h - section 8 says Paid Family Leave Insurance (PFL) benefits and it has an auto-populated box with our total income ($250k). The check box next to it is asking me to confirm that the number is correct.

What we received from Paid Family Leave was around $12k. I didn't enter the $250k amount and and wondering if it is correct being that it was auto-populated or if I should correct it to what was shown in the 1099-G ($12k).

[DaveF1006]

It depends. Paid Family Leave if entered correctly in your return should appear on line 7 of your Schedule CA as Unemployment Insurance, Looking at the Schedule CA, I don't see a Line 1h, section 8.  If possible, can you send us a screenshot  of what you see?

[torres1856]

The following is the auto-populated fields I'm referring to that I'm being asked to verify. The $258k number is our combined income and I'm being asked to confirm the PFL benefits. So I'm not sure if I need to change this number to the actual PFL benefits we received (approximately $12k) or if this is saying that our combined income is what the PFL benefits were based on. 

[MarilynG1 · Accepted solution]

How was your Paid Family Leave Reported?  On a 1099-G or a W-2?   If you received both and entered them into TurboTax, don't check the box.  

You may need to go back to your W-2 entry, and clear the checkbox for 'Paid Family Leave' there also. 

Click this link for more info on entering Paid Family Leave that may help you. 

[torres1856]

Thank you @MarilynG1 , many people apparently are having the same issue. Turbo Tax is auto-populating total income into the box previously shown and it wouldn't correct until I cleared the line item, deleted both our W-2 and 1099-G information. Once I submitted everything, I didn't get the error, nor did I get requested to verify my PFL benefits. The return isn't as high as originally shown but seems correct. . .in my mind.

[rramezani]

Marilyn,

I have the same problem and there is no checkbox in the W2 for PFL to uncheck. 

I went and checked several times.  TTAX is auto populating it in the CA section for the entire income from BOX 1 in W2.  it reduces the CA tax by a great amount and can cause problem for users.  

TTAX should fix this problem ASAP to save later penalty for the users.

Rezvan

[MarilynG1]

The pre-populated amount for PFL in California is the total from Box 1 of your W-2's.

You will need to adjust the amount to report the PFL amount you actually received, which may be reported on a W-2 from an insurance company or on a Form 1099-G from the state.

If your PFL was paid by your employer, you would enter $0 in your CA return.

Here's more info on Reporting PFL in California.

@rramezani 

[jasong22]

I'm having the same issue...but it seems like a bug to me.

My PFLA is reported on a 1099-G and my W-2.  The 1099-G is what EDD paid me.  The W-2 is what my employer paid me.

*Regardless* - If I leave my entire salary in the auto populated PFLA box.  My state tax is $0.  If I change the value int he box to be $0.  I *owe* $7k in state taxes.  But that doesn't jive with what they are saying.  The *higher* the number in that box I would expect my state taxes owed to go down.  Since it's claiming that CA doesn't charge tax on this type of leave.

Seems like TurboTax is doing some calculation which is the difference between the value in the PFLA box and the wages you've reported.

Can someone from TurboTax please comment on this!  It's a really bad glitch!

J

[MonikaK1]

See the comments from MarilynG1 earlier in this thread, and the discussion in this thread.

In California, Paid Family Leave (“PFL”) provides benefit payments to people who need to take time off work for certain family issues.  PFL paid by the California Employment Development Department (EDD) is reported on Form 1099-G, while PFL paid through a Voluntary Plan for Disability Insurance (“VPDI”) is reported on a W-2, either through the employer or a third-party insurer.  Generally, PFL is taxable on the federal return, but not taxable in California.  

The amount TurboTax shows in the California interview for PFL, asking if you need to edit it, is generally because the user checked a box in completing the W-2 in the Federal section indicating that some or all of the W-2 was attributable to Paid Family Leave.

If you indicate in the Federal section that some or all of the W-2 is attributable to PFL, TurboTax displays a PFL adjustment screen in the California interview, showing the total wages from the W-2 marked by the user as containing PFL and asking the user to review and adjust the amount as needed. The screen also instructs, “Don’t include PFL income reported on a 1099-G. This will automatically be deducted from your California income.”

If you got a W-2 from an insurance company for PFL, then you do subtract it from California wages. If, however, your employer just paid regular wages in your W-2, then you don't subtract it from California wages and you should remove it from the amount in the California PFL screen.

Any PFL reported on a Form 1099-G will automatically be deducted from your California income. Don't deduct it separately on the screen where you deduct PFL from an insurance company or you will get a double deduction. Also, don't deduct regular W-2 wages as PFL.

If you go back to the Federal section where you entered your W-2 and uncheck the box indicating that the W-2 was for PFL, and then restart the California interview, the wages should no longer appear in the California PFL box. Or, you can simply remove the amount of regular wages from the PFL box where it asks you to edit it if needed.

See this California EDD webpage for more information.

California regularly audits returns for this issue.

[eiichi]

I have just received the Notice of Proposed Assessment, and looks like neither I or Turbotax caught this issue before I file mine back in 2019.  I see our Paid family leave (8) way more than what we actually received.   

I am not sure why CA Tax board waited this long to point this out.  Unfortunately, I have no way to tell how it happened 4 years ago.

How can I correct this situation?  Just file a protest to the CA Tax board?  Seeing that this many people experienced the same issue, I wonder if Turbotax could help me go through this process.

Thank you!