1099-Misc for Paid Family Leave

[dfcamf]

This seems to be a continuing issue.  Received a 1099-Misc for paid family leave and Turbo Tax is showing it as schedule C income.  How can this be fixed?  Should I just enter it as Schedule G and hope for the best?  It has a significant impact on the return.

[SharonD007]

No, income from paid family leave isn't a business, but the income that you receive from your participation is taxable. The income is reported ‌as "Other Income" instead of self-employment income. You will have to delete the original 1099-MISC and re-enter it.

 Follow the navigation instructions in the TurboTax Help article Where do I enter a 1099-MISC?

1. Delete the 1099-MISC form that you already entered by selecting the trash can
2. Enter the 1099-MISC again
3. When you get to the screen that asks you Does one of these common situations apply? Select None of these apply
4. Select  No that it didn’t involve work like your main job
5. Select how often you received the money
6. Select No it didn’t involve the intent to earn money.

Your income will appear on line 8 of Schedule 1 of your 1040 as Other Income.

[dfcamf]

This worked, however, the PFL is not taxable in NY but it is carrying over to the NY return and making it taxable.  How can that be corrected?

[SharonD007]

You will have to make an adjustment on your New York tax return for that amount.

[kgaro113]

How do we adjust our New York returns for the Paid Family Leave amount?

[DianeW777]

It depends. According to New York Department of Taxation and Finance it is taxable on your New York (NY) return. Your employer is reporting the taxable amount. 

• Instructions NY IT-201

As of January 1, 2018, most private and certain public employees who work in New York State are eligible to take paid family leave.

What you need to know

If your employer participates in New York State’s Paid Family Leave program, you need to know the following:

• Any benefits you receive under this program are taxable and included in your federal gross income.
• Your employer will not automatically withhold taxes from these benefits; you may request voluntary tax withholding.
• You will receive either Form 1099-G or Form 1099-MISC from your employer showing your taxable benefits.
• Your employer will deduct premiums for the Paid Family Leave program from your after-tax wages.
• Your premium contributions will be reported to you by your employer on Form W-2 in Box 14 as state disability insurance taxes withheld.

@kgaro113 

[lyuan]

I followed this instruction multiple times, and every time after I input everything from my paid family leave 1099-MISC, TurboTax would put the income into Schedule C. This is so so so frustrating...

[AmyC]

Follow these steps:

1. Log in to your return.
2. Go to income
3. Scroll down to Other Common Income
4. Select Income from 1099-MISC
5. Edit/ Start/ Revisit
6. Enter income -the income should be in box 3,
7. Enter tax if any withheld in box 4
8. Continue
9. Describe the reason -
10. continue
11. None of these apply
12. Continue
13. Did this involve main job?
14. No 
15. Continue
16. How often do you get?
17. Got in 2024 
18. Continue
19. Intent to earn money?
20. No
21. Continue
22. Do you have another?
23. No
24. Continue

@lyuan 

[water-fire]

deleted and input so many times, but never seen that intent to earn money page...😫 what did I miss???

[DianeW777]

It depends. If you do not have any income on your Schedule C for self employment then you may not have a concern.  The following questions will come up for a 1099-MISC (not Form 1099-NEC) when it is entered if the income is in Box 3. For Paid Family Leave it's important to answer the question(s) 'No'. It may depend which box the income is in (box 3 would be the normal place for this type of income).

Open your TurboTax Online/Mobile or TurboTax Desktop tax return

1. Search (upper right) > type 1099misc > click the Jump to... link
2. Begin your entry of the 1099-MISC.
   1. Be sure to select No this did NOT involve work and No it did not involve an intent to earn money
3. Continue to complete this section.

@water-fire