I know there are state sponsored PFL (paid family leave) programs. However, I believe my 12 weeks of parental leave was paid by my company (they call it “parental benefit wage replacement” on payslips). The amounts were added to my wages on my W2. TurboTax had “paid family leave” listed as an uncommon situation during W2 entry but didn’t ask anything further when I checked the box. I’m wondering if the fact I was paid for 12 weeks off when we had a baby changes our tax situation. If the payments aren’t taxable, our refund would likely change dramatically.
Yes, the parental leave that you received would be taxable income. The IRS guidance states:
Congratulations!