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Level 3
posted Feb 21, 2022 8:13:58 AM

Why does Massachusetts PFML tax not appear on Schedule A under "taxes you paid"? It did last year, but only after I reported it as a bug to TT.

Should I add it as a local tax to make TT take it into account?

0 3 958
3 Replies
Expert Alumni
Feb 21, 2022 12:22:28 PM

The IRS has not included Massachusetts Paid Family Leave as a deductible tax so TurboTax does not allow the deduction automatically.  

 

As an employee, you can deduct mandatory contributions to state benefit funds withheld from your wages that provide protection against loss of wages. For example, certain states require employees to make contributions to state funds providing disability or unemployment insurance benefits. Mandatory payments made to the following state benefit funds are deductible as state income taxes on Schedule A (Form 1040), line 5a.

  • Alaska Unemployment Compensation Fund.

  • California Nonoccupational Disability Benefit Fund.

  • New Jersey Nonoccupational Disability Benefit Fund.

  • New Jersey Unemployment Compensation Fund.

  • New York Nonoccupational Disability Benefit Fund.

  • Pennsylvania Unemployment Compensation Fund.

  • Rhode Island Temporary Disability Benefit Fund.

  • Washington State Supplemental Workmen's Compensation Fund

(Contributions to state benefit funds)

Level 3
Feb 24, 2022 7:17:50 AM

Last year TT included it as a deduction. I'm not aware of any changes, so why wasn't it included this year?

Expert Alumni
Mar 1, 2022 2:22:43 PM

The IRS has not issued guidance on whether the PFML is pre-tax or post-tax. Your employer may be withholding it pre-tax this year, in which case it would definitely not qualify for the deduction. See Mass. wage reporting. Since the IRS is debating how the tax should be handled, it is not included this year in the IRS list -as shown above, (Contributions to state benefit funds). However, if you overcontributed to the fund, like with changing jobs, you do get a refund on your MA tax for the overage charged. Any earnings over $142,800 are not subject to tax.