Maternity benefit - Paid family leave without 1099G

[lviki]

I talked to insurer. All the amount was paid by them. They mention that W2 which has box 14 with CAPL, is not taxed for California state. They don't have any info what is the qualified amount for California state. But for sure they took California state benefits as I received "notice of computation" letter from EDD.

They mentioned that tax professional should be able to handle it but I am not sure what can be done with form 1099G.  No form 1099G is coming as it was paid by paid by insurer.

I know number of weeks I received benefits and EDD letter show weekly and daily benefit. Is there any way I can claim state tax exemption? 

[KrisD15]

"Is there any way I can claim state tax exemption? "

I'm not sure what you are asking. 

If the benefits were paid to you through the insurer, and the amount is reported in Box 14 and NOT included in Box 1, you are not being taxed on the benefits. 

Why would you need an "exemption"?

If the benefits were paid by the state, you would have received a 1099-G and that would be taxable income. 

Since your employer used a third party payer, you won't get a 1099-G from the state.

If your employer paid the premiums for that policy, the benefits would be included in Box 1 as wages of that employer's W-2.

If the benefits are only listed in Box 14 of the insurer's W-2, it isn't taxable. 

@lviki

[lviki]

Thanks @KrisD15  for the help.

Insurer W2 has both box 14 and box 1 filled.  There is some small amount in 12c box for this W2. Amount of Box1 + 12c is equal to box 14 amount

Based on your comments, I am assuming that since Box1 is also filled in this W2 then I cannot claim state exemption for this amount. 

[KrisD15]

You can.

Below is a TurboTax link on the subject. 

Looks like you select that the W-2 is for Family Leave (taxable on the Federal return) and when you start the California return you will enter that amount so it will not be taxed by the state.

Since this was not paid by your employer but rather through the insurer, enter the full amount on the state screen.  Paid through the insurer is similar to being paid though the state. This W-2 should suffice as a substitute for a 1099-G.   

"When you indicate in TurboTax that the W-2 is PFL, a screen about PFL appears in the California section of the interview.

The amount of PFL wages on the W-2 is displayed, so you don’t have to look it up. However, you must enter the amount (if any) that was paid by an insurance company, and not your employer.

If none of the amount was paid by an insurance company, but all of it was paid by your employer, then you must enter zero ($0) in the wages box, because any amount reported by your employer in box 16 of a W-2 is considered by California as compensation for services or taxable fringe benefits."

TT LINK

According to the state of California:

"A Voluntary Plan (VP) is an alternative to State Disability Insurance (SDI). A VP must provide all the benefits of SDI and at least one benefit that is better than SDI, and it cannot cost employees more than SDI. An employer or a majority of employees can apply for approval of a VP to receive Paid Family Leave (PFL) and Disability Insurance benefits. For more information, visit Voluntary Plan Information."

CA LINK

[lviki]

@KrisD15  Thanks a ton. I think the solution you mentioned is the right answer.  I went through the added links and it explains. 

I tried that option of enabling PFL for that W2 earlier. It added form 1099G so I got confused if it is mandatory requirement. I will ignore that form and proceed with the filing.