How does TurboTax treat Washington state Paid Medical Leave?

[robbertom]

WA state now has a PFML program, and while they are issuing a 1099-G for family leave, they are not doing so for medical leave (see 3rd question here https://paidleave.wa.gov/help-center/individuals-and-families/payments/ on the state's page). Is there any reporting requirements for receiving medical leave benefits from the state? If so, is there any plan to address this in TurboTax, or some other way to report medical leave benefits from the state? Within TurboTax, I'm not able to report government benefits unless a 1099-G has been provided.

Thanks!

[MarilynG1]

If the Medical Leave was paid by the State of Oregon, you should receive a 1099-G.  

Typically, companies that offer paid medical leave or disability do so through a third-party insurer. You may receive a separate W-2 from that insurer to report the PFL income or you may see the PFL reported as third-party sick pay on your regular, company-issued W-2.

Click this link for more info on Medical Leave.

[robbertom]

@MarilynG1 State of Oregon is not State of Washington; Washington has made it clear that they will not be providing 1099-G for Paid Medical Leave:

Will everyone who received Paid Leave benefits in 2020 get a 1099-G?

No. We only issued 1099-G forms to customers who received family leave benefits in 2020. Family leave includes leave to bond with a new child born or placed in your home and leave to care for a family member with a serious health condition.

If you received both family and medical leave in 2020, your 1099-G will only include the family leave portion.

[AmyC · Accepted solution]

My opinion:

• The department of labor offers a comparison chart for types of sick and family leave here. The paid family leave is compared to an insurance policy reminiscent of a disability plan.
• The state of NY has decided their matching version of Paid Family Medical Leave will be taxable.
• WA offers free help.
• In an insurance plan, like disability, if you pay the premiums, then the collection is tax free. While if you did not pay the premiums, you pay taxes on the income.

Putting all of this together, makes me think this will probably end up being taxable. I imagine there will be lawsuits to settle the issue definitively.

Since the IRS has not made it taxable yet, I would not report it.

If you want to go ahead and pay taxes on it, you can enter it as Less Common income > Other Reportable income. This allows you to pay the federal tax- not the Medicare and Social Security tax.

[nrougutt]

Can anybody help. I like to know how to input  WA  Paid Medical Leave on the 1040.

[LoganathanB]

Yes, Unemployment and Paid Family Leave reported on a 1099-G are taxable on your Federal return. 

Click on the link to input WA  Paid Medical Leave on the federal tax return.

Report your 1099-G for unemployment or paid family leave.

[CarrieP]

In Washington state, the state has been taking money from our paychecks for over two years. They had to be collecting money from employees for at least a year to be eligible for the PFML program. Since they've been taking the money from our paychecks, does that count as a premium for the use of the service? I know if someone uses PFML for say, a dad to bond with his child, that is taxable income. No one seems to have an answer as it relates to the use by the employee for their own personal significant health issue when the could not work. Do you have any guidance related to this?

[Vanessa A]

Yes, the paycheck withholdings are considered premiums paid for the PFML benefits.

The taxability of the income when used for your own health issues versus a father bonding with a child, is different.  Washington is following the lead of other states with similar programs on the taxability of these benefits, as the IRS has not officially given them guidance, but they believe that payments for Family leave is taxable while payments for medical leave are not taxable. 

[Lulu86]

This appears to be a very grey area as the letter provided by WA PFMLA is very unclear, would like to know if it is advisable or necessary to file the 1099-G for family leave form provided or not? I have yet to find a clear cut answer for this. Please advise

[ShirlynW]

Yes. It is advisable to file form 1099-G if you received one. The IRS has declined to give states guidance on the taxability of  PFMLA. Based on other states with similar programs, Washington thinks it is likely that family leave benefits could be taxable and medical leave benefits would not.

Washington is only issued 1099-G forms to customers who received family leave benefits in 2022. Family leave includes leave to bond with a new child born or placed in your home and leave to care for a family member with a serious health condition. The amount of family leave benefits you received in 2022 is "Box 1."

To enter form 1099-G from Washington, follow these steps:

1. Open or continue your tax return.
2. Go to (Your income and expenses.)
3. Scroll to "Unemployment."
4. "Unemployment and paid family leave," Start or Revisit."
5. ("Did you receive unemployment or paid family leave…)," "Yes."
6. ("Where did you get your benefits…,)," Government (Form 1099-G).
7. ("Were you required to repay…)," "No"
8. Continue

[douglasrubin]

I understand the confusion because WA was inserting the following into their taxpayer's 1099-G

https://paidleave.wa.gov/app/uploads/2022/01/2023-2024-1099s-insert.pdf

But more recently, a client was issued CP2000 Notice from IRS that stated the 1099-G (Unemployment) income would be considered federally taxable.

.

So while the issue was cloudy in 2022, some taxpayers seem to be getting rained out with belated tax notices and interest, but interestingly, no penalty.

[bagel001]

IRS issues guidance for the District of Columbia and States that have paid family and medical leave ...

[hale_me_now]

I've had the same question and just came across this IRS ruling in early 2025...Can anyone dumb it down for me, with the specifics for Washington State?

https://www.irs.gov/newsroom/irs-issues-guidance-for-the-district-of-columbia-and-states-that-have-p...

[DaveF1006]

The IRS has not offered clear guidance on whether or not Paid Family Medical is taxable or not.  Until clear guidance has been established, Paid Family Medical leave is taxable in Washington state until we hear otherwise from the IRS.

@hale_me_now 

[bagel001]

@DaveF1006 IRS has already issued guidance - https://www.irs.gov/newsroom/irs-issues-guidance-for-the-district-of-columbia-and-states-that-have-p...

My understanding of the above IRS guidance is that the medical leave payments attributable to employer contribution of the premium are taxable. Per this link Estimate your Paid Leave payments – Washington State's Paid Family and Medical Leave the employers in WA paid 28.57% of the premiums in 2024 so I guess that % of the medical leave benefit received in 2024 should be taxable and rest is non-taxable. Hope my understanding is correct. Experts please chime in!