Oregon Paid Leave Question

[OregonSalmon]

I'm working on my daughters taxes and she applied for the Oregon Paid leave when she was out of work for 8 weeks in Nov & Dec 2023. She has never received a payment from them (MetLife) as they repetitively say they are still processing her application. I know that any income from Paid Leave in Oregon is considered earned income, so my question is if she receives a check in February or March 2024 will she need to claim it on her 2023 taxes since that is when she applied or should it  be claimed on 2024 taxes?

[MarilynG1]

That depends.  It MetLife sends her a W-2 or 1099-Misc that is marked 2023, she will need to Amend her 2023 return to add it.  If it's marked 2024, she can add it to her 2024 return. 

However, you have up to three years to Amend, so it wouldn't need to be done immediately.

Here's more info on How to Amend Your Tax Return and also Oregon Paid Leave. 

[OregonSalmon]

So there’s no IRS requirement that mandates that she claim the money in the year she receives it or the year she applied for it? My takeaway from your answer is that it all depends on how MetLife decides on whether to send her a 2023 or 2024 tax form. I’m wondering if my daughter can request a 2024 tax form so I can submit her 2023. 

[DMarkM1]

The form should be for the year the benefits are paid out, in your case 2024.  However, you can certainly contact MetLife and confirm the benefits paid year.  

Here is an extract from the form W2 instructions.  

"Calendar year basis.

The entries on Form W-2 must be based on wages paid during the calendar year. Use Form W-2 for the correct tax year. For example, if the employee worked from December 15, 2024, through December 28, 2024, and the wages for that period were paid on January 3, 2025, include those wages on the 2025 Form W-2."

This is from general instructions for information returns such as a 1099.

"Reporting period.

Forms 1097, 1098, 1099, 3921, 3922, and W-2G are used to report amounts received, paid, credited, donated, transferred, or canceled, in the case of Form 1099-C, during the calendar year."

[OregonSalmon]

I didn’t realize that the payer has the discretion to issue a 1099 misc in any year. I thought there was an IRS requirement that stated the earned income had to be claimed in the year in which it was applied for (Oregon Paid Leave) or in the year that the money is paid. MetLife the (Payer) can’t give a straight answer if a 1099 misc will be issued for 2023 (application year) or 2024 when the check will be disbursed. I’d like to file my daughter’s taxes this month without having to amend them. I was expecting a definitive answer per IRS guidelines & policy. If that’s not the case then I will wait for MetLife management to eventually inform me of the 1099 misc year.

[OregonSalmon]

I forgot to mention that the check has yet to be sent. Doesn’t the payers have a deadline to send the 1099 misc form like they do with a W-2 (Jan 30th)?

[AmyC]

As a cash basis taxpayer, the income is taxed when received. If it was not received in 2023, it won't be taxable.  You will claim it on your 2024 return and have the paperwork to go with it.