Paid family leave income

[rblanner]

My wife and I were both on paid family leave for a portion of last year. Under our State Tax return, we were asked to input our PFL income that was paid for by our employers insurance company. TurboTax put in a default amount, which happened to be our combined income for the year in total wages. I do not believe any of it was paid for by our employer's insurance, as I thought it was paid for by the state. Please advise and this has a significant impact on our return from the state of California.

[TerryA]

When PFL comes from the Calif EDD, it is reported on a 1099-G which you enter in the federal return. TT/Calif then knows it is PFL and subtracts it out of income for you - no further entries need be made for that.

When PFL is administered by an employer's voluntary plan disability insurance (VPDI) it is sometimes reported to you on a separate W-2 and is included in your federal wages. On the federal W-2 entry screen there is a question where you can indicate this is a PFL W-2. TT/Calif will then subtract that federal wage amount from your Calif income but you can enter a different amount if only some of it is qualified PFL.

Note that PFL paid by the employer is not excludable - it must be paid from the Calif SDI program or the employer's voluntary plan (VPDI) to be excluded from Calif income.