Oregon PFML tax reported on W-2

[ora123]

Starting from 2023, Oregon employers are required to deduct contributions to Paid Family and Medical Leave insurance fund from payroll. This amount is reported on W-2 box 14 with code "PFML" or similar. To make a distinction from other topics where "PFML" is mentioned, this is not a benefit received, but a payroll deduction. When I import W-2 to Turbotax, it asks me to select category for this item. In the provided list of categories, the closest two are "Oregon Paid Leave" (though, this may be related to benefits received and not the payroll deduction) and "Other deductible state or local tax" (however, if I understand correctly, this is not a tax per se but rather mandatory paid leave insurance contributions imposed by the state). What category should I choose? Will this amount have any effect in the tax return? Is it part of SALT? Can it be deducted from local taxable income for Portland Metro SHS and PFA taxes?

[DMarkM1 · Accepted solution]

The best option is the box 14 category for "OR Paid leave;" this not benefits related.  Benefits will not be reported in box 14 on a form W2.  

You are correct OR employers are to deduct employee contributions to the OR Paid Leave program from employee pay. Those contributions are post-tax meaning they are still included in box 1 as taxable income.  Employers may report those contributions for informational purposes in box 14 on the form W2.  

Those contribution amounts in box 14 have no affect on your tax calculations.  Additionally, they are not an itemized deduction, federal or state; so no affect on SALT. As you surmise these are not taxes but insurance contributions. 

The box 14 category "OR Paid Leave" will work and so will the category "Other (not classified)" as neither of these add to any other tax forms in your returns.

Here is the OR reference.