California PFL - Double reported, on my W2, and on a 1099G. What do i do?

[ralphn]

While working for a company that pays hourly (contractor, no extra benefits), I went on PFL and took the time off for a baby.

During that time, I submitted for PFL directly with the state (california), assuming my company offered no special benefits, so I didn't do it THOUGH them.  I was receiving paychecks from the state.

At the end of the year, I had a discussion with my company about it (who were offering to help me make claims) but I told them I already took care of it, and did it myself with the state, directly.

I now feel like I am in a situation where I am double-reporting the PFL as income, and will get double-taxed federally. 

Sources:
1) I now have received a 1099G for the amount

2) I noticed that my company also included the same amount on the W2.  I inspected the final paycheck in 2022 and saw they added the PFL amount, and then "adjusted" it back so that it's a $0 paycheck.  The PFL is included in Box 1 and Box 14, but the company never paid it out to me (it came from the state).

Is this expected?  Do companies do this?  Should I NOT be reporting my 1099G since my W2 is reporting? I'm not sure who/what is at fault and what I should be doing.

[MonikaK1]

In California, Paid Family Leave (“PFL”) provides benefit payments to people who need to take time off work for certain family issues.  PFL paid by the California Employment Development Department (EDD) is reported on Form 1099-G, while PFL paid through a Voluntary Plan for Disability Insurance (“VPDI”) is reported on a W-2, either through the employer or a third-party insurer.  Generally, PFL is taxable on the federal return, but not taxable to California.  

PFL income reported on a 1099-G will automatically be deducted from your California income on Schedule CA.

If you believe that your employer included amounts paid by the State on your Form W-2, contact the employer for an explanation and a corrected W-2, if applicable. An employer should only include Paid Family Leave on a W-2 if it was paid through the employer or their third-party insurer.

See this help article for more information from TurboTax on Paid Family Leave.

[ralphn]

Thanks MonikaK1, I will be reaching out to the employer to confirm that it was a mistake on their end.  Hopefully we can get the W2 correctly and the PFL amount removed from it.  I'll reply back with the outcome.