Paid Family Leave (PFL) income is taxable on your federal return, but not taxable on your California State return if either of the following situations apply:
- It’s paid by the state's Employment Development Department (EDD) and appears on a 1099-G form
- It’s paid by an insurance company under a Voluntary Plan for Disability Insurance (VPDI) and is reported on a W-2 from the insurance company
If your PFL is reported on a W-2, you must enter the amount (if any) that was paid by an insurance company, and not your employer.
If none of the amount was paid by an insurance company, and all of it was paid by your employer, you must enter $0 in the wages box because any amount reported by your employer in box 16 of a W-2 is considered compensation for services or taxable fringe benefits in California.