After entering w2 and selecting that "all or part" of this income was from PFL; state taxes now think ALL of that money was PFL...should this be calculated from 1099G?

[DianeW]

Paid Family Leave (PFL)  benefits are reportable for federal purposes but not state tax purposes. The Employment Development Department (EDD) will provide all claimants with a 1099G form and forward a copy of the 1099G to the IRS. PFL benefits are not taxable or reportable to the California (CA) State Franchise Tax Board.

When you also receive a W2 from your employer that includes PFL you can follow the steps next.  When you are completing the CA return TurboTax will bring up a screen for you to enter the amount of the W2 that is PFL. I think it may default to the entire Box 1 amount but you should change that to the PFL amount mentioned on your W2 or the amount you know to be the PFL. That amount will be subtracted from your federal wages on Schedule CA line 7.

[cariboupeter]

Would the amount entered here include any PFL wage supplement?

[carolollivier]

WHY does TurboTax default to what could be a huge mistake: all of w2 income vs much smaller amount? Seems ridiculous.

[myles1]

How do you change the amount from the default all?

[DMarkM1]

Per DianeW above,  "When you are completing the CA return [in the income section] TurboTax will bring up a screen for you to enter the amount of the W2 that is Paid Family Leave. It may default to the entire Box 1 amount, but you should change that to the PFL amount mentioned on your W2 or the amount you know to be the PFL. That amount will be subtracted from your federal wages on Schedule CA line 7."

[Skim104]

I received a huge backtax assessment from the CA FTB for this very issue. Turbotax automatically allocated ALL of my W-2 income to PFL, which resulted in an underpayment and now a bunch of interest for the 3 years I did not know this happened. Has anyone had luck getting Turbotax to cover the interest, or get the state FTB to waive the interest for this reason? 

[JotikaT2]

It depends.

The interest could be covered if it was a calculation error, not an input error.

Please see the following link to determine if you fall under this category and how to go about submitting a claim.

Accuracy Calculation Guarantee

Submitting a claim