How does TurboTax treat Washington state Paid Medical Leave?

[DaveF1006]

It depends. Assuming the employer is aware of the IRS guidance, then the PFML that is being reported is based on 28.57% contributions that they made and reported the 1099G amount based on that percentage.

The employer is responsible for making the percentage adjustments and as a taxpayer, you are not allowed to make those adjustments on your own. The amount of PFML that is reported is fully taxable to you.

[bagel001]

State pays the Washington PFML medical leave benefits not the employer. WA State is not giving out 1099G for medical leave benefits, only for family leave benefits. So we have to interpret the new IRS guideline and include taxable portion of the medical leave benefits in our returns ourselves. The guideline clearly says (refer situation 3 in the IRS guideline) that the state medical leave benefits attributable to employer portion of the premium contribution is taxable. Employer is contributing 28.57% of the PFML premium for tax year 2024. Hence we have to include only that % of the benefits in our federal taxable income for 2024.  I would include that under  "Less Common Income" --> "Other reportable income"

@DaveF1006  - Does this make sense? 

[bagel001]

Experts please kindly advise on the last (above) message

Thank you!

@DaveF1006 

[DaveF1006]

No. We cannot render an opinion on if this is the correct way to report this without clear guidance from an authoritative source. While this may sound plausible from your perspective, this interpretation could raise red flags. 

My suggestion is to hire a tax professional to give his/or her to give an authoritative opinion and let them be responsible for their opinion. If you make your own decision to report this in the manner you prescribed, you have my blessing. You are on your own. 

Besides, the PMFL that is reported to you as income may already reflected and based on the employers contribution and not the full amount of payments you received during the year.