You should have a Form 1099-G, not a 1099-MISC for your Paid Family Leave. Paid Family Leave (PFL) income is money you receive from your employer, an insurer, or the government while you are away from work for an extended period of time so you can recover from a serious health issue, take care of a seriously ill family member, or bond with your newborn or newly adopted child.
In the United States, employers who offer PFL are the exception rather than the rule. PFL is usually only available through larger employers, if it is offered at all. A small but growing number of states have enacted PFL legislation. They include California, Connecticut, the District of Columbia, Massachusetts, New Jersey, New York, Rhode Island, Oregon, and Washington. The National Partnership for Women Families keeps a list of state PFL laws.
Paid Family Leave is different than paid time off like sick pay. For example, a new mother working at a company that does not offer PFL, might still take maternity leave based on accrued sick days. This pay falls under paid time off, and it is taxed differently than pay from PFL.
Unemployment compensation and paid family leave are entered in the same place:
Open or continue your tax return.
If you have a 1099-MISC instead of a 1099-G, the income may not be paid family leave and should be reported elsewhere. Typically, companies that offer paid medical leave or disability do so through a third-party insurer. You may receive a separate W-2 from that insurer to report the PFL income or you may see the PFL reported as third-party sick pay on your regular, company-issued W-2.
I have the same issue. I also received a W2, but that was for a claim entirely paid within 2022. The payment on the 1099-MISC was for 2022 payments on a claim opened in 2021. I know where to enter the W2, but entering the 1099 drops me from a $200 return to a $400 payment (approximately). What am I doing wrong? Should I enter this as a 1099-G? It was paid by a third party insurer, but is MA PFMLA.
Report this as 1099 income that is not self-employment income.
Follow the steps below to report income on an IRS Form 1099-MISC.
The entry will be reported:
View the entries at Tax Tools / Print Center / Print, save or preview this year's return / Include government and TurboTax worksheets.
How did you end up handling this? I have the same situation, recieved a 1099-misc for MA pfml through a third party insurer.. Did not receiveba 1099-G.
I entered the 1099-misc and I'm ready to hit submit, but I feel like I'm still not sure I did it correctly.
I ended up treating it like a 1099-G. I found some vague references that implied that was the correct way to do it. It filed ok with no issues, and cost me less than 1099-MISC would have. Hope this helps.
Looks like JamesG1 might have the correct steps in his February post.
I believe the 2024 turbotax software has a bug and now it does not work for anyone trying to put in paid family leave with a 1099-misc form.
Previously this post said there should be these question in the 1099-misc section but 2024 version these two question does not show up.
It's treating like we own a business and asking us all these question about owning a business which is not correct.
To enter Form 1099-MISC received instead of a W-2 for Paid Family Leave, in TurboTax Online:
Answer the interview questions for this one-time payment:
If you enter the 1099-MISC following these steps, you will see the questions about work and the intent to make money.
When I fill out earning from1099-misc, for family medical leave, the TurboTax fills out Schedule C, which seems to be unrelated. How can I avoid this schedule C?
Thanks. But TurboTax is filling out schedule c and asking for unrelated questions for business and flagging it. What do I do?
It appears there is no correct answer to this issue except to 1) Submit a Schedule C or 2) Enter the 1099-MISC as if it were a 1099-G.
This is not good Turbotax!!!
Do not enter your information as a 1099-G unless you received a 1099-G. These forms may not receive the same tax treatment at the state level.
To enter Form 1099-MISC received instead of a W-2 for Paid Family Leave, in TurboTax Online:
Answer the interview questions for this one-time payment:
If you enter the 1099-MISC following these steps, you will see the questions about work and the intent to make money.
If you answer "yes" to that question, TurboTax may create a Schedule C assuming the amount represents self-employment income.
If you are in California:
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.
Paid Family Leave (PFL) income is taxable on your federal return, but not taxable on your California State return if either of the following situations apply:
If your PFL is reported on a W-2, you must identify the amount (if any) that was paid by an insurance company, and not your employer.
On the “Do any of these uncommon situations apply to this W-2?” screen in the federal interview, if you mark the W-2 as containing PFL, then TurboTax will display a PFL adjustment screen in the California interview, showing the total wages from the W-2 marked by the user as containing PFL, and asks 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 none of the amount was paid by an insurance company, and all of it was paid by your employer, enter $0 in the wages box in the PFL adjustment screen in the California interview, because any amount reported by your employer in box 16 of a W-2 is considered compensation for services or taxable fringe benefits in California.
The California Franchise Tax Board regularly audits returns with this issue and adds back to California income any amount incorrectly identified as PFL that was paid by an employer as regular wages or was excluded twice by deducting amounts already excluded on Form 1099-G.
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.
See this California EDD webpage for more information.
I have this same problem. It worked last year, but not this. TurboTax needs to fix this ASAP.
To enter a Form 1099-MISC that is NOT from work
Click on Federal Taxes (Personal using Home & Business
Click on Wages & Income
Click on I'll choose what I work on
Under 1099-MISC and Other Common Income
On Form 1099-MISC, click the start or update button
Enter the Form 1099-MISC and follow the interview. You will land oh the following screens to indicate the income was NOT from work.
Screenshots are from the 2023 TurboTax Premier desktop edition. The same screens are available using the TurboTax online editions -
I was issued a 1099-Misc. for PFL by the private insurer who made PFL payments. This is not for any other type of income. Turbotax automatically treats this income as Schedule C other income, but it is not - I did not work for the income, it is just PFL. The answer from James in 2022 below seemed helpful but the Turbotax mask has changed and doesn't seem to allow me to report it in the way he describes, it assumes it is for work and tbumps Sched. C, which doesn't apply for this situation. Should I treat the 1099-Misc as a 1099-G within Turbotax?
Yes, you are correct. This is not self employment income and should be reported by using the steps below. Once completed this will move the income to the Schedule 1, then the 1040. You may need to delete the Schedule C.
This will complete the entry and you can continue to work on your tax return.
You'll need to delete this form Schedule C --------------------.
You can review your return using the steps below. For TurboTax Desktop simply switch to Forms (upper right).
@Riley DE
Hello. Regarding a 1099-Misc for 2024 FMLA benefits:
I agree, Oregon should report the benefits on 1099-G, but they are reporting on 1099-MISC, for the second year in a row, it seems. What complicates this is...
Oregon just sent out a clarification on where to report the Paid Leave Oregon (tax) subtraction - saying to follow 2024 instructions for 1040 Schedule 1, line 7 on where to report the subtraction. That line is for unemployment benefits.
If one enters the 1099-Misc as other income, but the decrease in that other income by the fmla taxes paid, it will look weird on the return, in my opinion.
Is the consensus to report this as unemployment compensation or as other income?
Thank you.
Hello. Regarding a 1099-Misc for 2024 FMLA benefits:
I agree, Oregon should report the benefits on 1099-G, but they are reporting on 1099-MISC, for the second year in a row, it seems. What complicates this is...
Oregon just sent out a clarification on where to report the Paid Leave Oregon (tax) subtraction - saying to follow 2024 instructions for 1040 Schedule 1, line 7 on where to report the subtraction. That line is for unemployment benefits.
If one enters the 1099-Misc as other income, but the decrease in that other income by the fmla taxes paid, it will look weird on the return, in my opinion.
Is the consensus to report this as unemployment compensation or as other income?
Thank you.
Report the income in the area for the type of form on which it was reported (including a 1099-MISC). You don't report it on a Schedule C. There are multiple answers in this discussion thread showing how to enter a 1099-MISC so that it doesn't appear to be self-employment income. Here is one:
There is also a new IRS Revenue Ruling, RR 25-04, that also addresses the issue of paid family leave from state programs. It is currently open for comments and it is advising states on how to report this income.
See here for more information on the Oregon 2024 legislation that affects Paid Family Leave effective 7-1-24..
Thank you Monika for responding to me! I wasn't sure if anyone would since this discussion is a year old.
I do know not to report it on a Schedule C.
My question was concerning the subtraction to FMLA income for withholding taxes paid. I was not clear. Sorry.
My question is to report it as "other income" or unemployment income for purposes reporting the subtraction if the taxpayer does not itemize. The State of Oregon really should report this on a 1099-G.
I think I am going to report it as unemployment income on Schedule 1, line 7 to correspond with the federal instructions on how to report the subtraction. Because I cannot report the subtraction only on Schedule 1, line 7.
I'm having a similar problem trying to report my wife's maternity leave. She was paid through a benefit provider who issued a 1099-MISC. I tried following these instructions but never got an option to select whether it involved an intent to earn money. We are married filing jointly; I am self-employed but my wife gets a W2. TurboTax went straight from asking which year the income was earned in to asking which business to associate the income. Is there any way to force it to ask that question, or to go directly into the form and correct it?
Be sure you are not inside a business to enter the form. You need to be on the main income screen. The online and desktop programs are a little different. The key points are that you have to mark:
Add one more set of instructions that contains the key elements you need to locate and answer from above.
@nseelen If you are using the desktop version, you can see it in Forms mode.
Thanks for the help!
For anyone else struggling with this issue, the key point was to select that we only received this money in 2024. Because her maternity leave straddled 2023-2024, we did actually receive it in both 2023 and 2024, but selecting that option made TurboTax treat it like a business instead of a benefit. When we took 2023 out, we were allowed to go onto the question about whether there was an intent to earn money.
Hello.
The State of Oregon is actually very helpful. I emailed them.
They said the Oregon subtraction is only for family leave for 2024.
For 2025 only a portion of medical leave benefits are taxable - only the employer portion is taxable.
I have not had time to double check this.
They said they cannot give guidance on how to report for the IRS and not sure what they will do if you report a lower amount on your return than was reported on the 1099.
Not sure if this helps.... But it is the information I have.