Is MA paid medical leave taxable?

[Hutcha]

The MA PFML site states the following...

As of April, 2022, the IRS has not yet made a ruling on whether your PFML benefits are considered “taxable income.” Massachusetts tax treatment will follow the guidance provided by the IRS.

In 2021, I went on short term disability. I have always carried STD insurance that is paid for with after tax dollars. Last year, MA instituted a PFML tax, which I pay for. My STD payments, which were definitely tax free, were reduced by the amount that I received from MA. I was sent a 1099G for these payments from MA, but they provide the following disclaimer "The Department is issuing 1099-G forms to all employees who received PFML benefits in 2021 in the event that you need this information for filing your 2021 tax return. How you, as an individual, report this income for tax purposes is up to you and your tax professional".

Are the payments I received from MA taxable? If they are, it increases my tax liability by $5,000! I really don't think it's fair, because they forced this insurance on me when I already had a suitable alternative and would have received the same money tax free.

[DMarkM1]

There is no ruling yet.  Either way you must enter the 1099G information for reporting.  It will show as taxable.  Once an IRS ruling is made and If the ruling makes part or none taxable, then any returns already filed but not processed will likely be corrected during processing, if necessary.  Any returns already processed will need to be amended.  Those that have not filed will correct before filing.  

Note:  There is an exemption available for those covered by an employer private plan that exceeds the MA plan.  Here is the MA reference (see the exemption section).  Your employer must request/apply for the exemption.  

[NanDon]

When I first applied for medical leave with the state of Ma I was told that these payments have never been taxed and might not be going forward. Had I been told they would be taxed I could have been more prepared to pay the tax of over $3000. Plus I was forced to take theses payments before I could take my company’s STD.  So not fair!  They could have at least given a grace period