WA folks who took WA Paid Family Leave in 2022. Did you include Paid Family Leave income reported on 1099-G by the ESD ?

If not, why and how do you plan to deal with later if IRS decides its taxable ?

#tax #1040 #Paid Family

Comments

Logizyme t1_japjn6t wrote on March 3, 2023 at 3:02 AM

The 1099-g comes with a letter telling you how it is taxable.

Why would you try not reporting it? They even automatically withhold tax on your FML payments.

IceDragonPlay t1_japw617 wrote on March 3, 2023 at 4:50 AM

No, they specifically warn you that no withholding is done and you need to plan for tax effects.

It is taxable until IRS says different. WA set it up the same way CA did and have it administered by ESD. IRS ruled CA is taxable in the same way unemployment benefits are taxable.

Due-Rule9075 OP t1_jaqczle wrote on March 3, 2023 at 8:00 AM

WA and CA - PF&ML are set up differently as in CA employees contribute to a joint pool for PFL, PML, DI, etc. which is CA SDI (State Disability Insurance) whereas in WA employees contribute directly to a dedicated PF&ML program of ESD.

Not sure, how much it matters....but in IRS Publication 525 (2022) under "Other compensation" mentions as follows .....

Other compensation.

Many other amounts you receive as compensation for sickness or injury aren't taxable. These include the following amounts.

Compensatory damages you receive for physical injury or physical sickness, whether paid in a lump sum or in periodic payments. See Court awards and damages under Other Income, later.
Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income
Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy.

IceDragonPlay t1_jb1bekt wrote on March 5, 2023 at 6:00 PM

Well, I will hope the differences will bring a different outcome for WA. We are paying the taxes with the filing, but will send a letter of circumstances and request a ruling. Hopefully they will render a ruling while an amended return can still be filed.

Personally I wished they did not have ESD administer it since CA decision was already made by then.

To me the family leave benefit seems like an insurance payment and the PFML website shows that 100% of family leave premium is paid by the employee. But if it were that straightforward then the IRS would have easily made a ruling on it when the state asked. It isn't something that should have different rules based on individual tax accountants. I would not want the risk of a surprise bill and penalty, so we pay it for now.

blandlady t1_japrycl wrote on March 3, 2023 at 4:11 AM

How did you get tax automatically withheld? From my understanding that wasnt available. Do you have to select it somehow when applying?

Logizyme t1_japxpid wrote on March 3, 2023 at 5:04 AM

I don't recall if I had to select it. I think it was auto selected, but recall there being an option to adjust. Mine was pre withheld at 10%

A copy of the 1099 is filed with the IRS, so it's not one that's going to slide. You're best to start working on an amended return with your tax pro if you forgot to include it.

[deleted] t1_japeoh4 wrote on March 3, 2023 at 2:23 AM

Yes and I am still waiting for my 1099-G, it's holding filing my taxes back and it sucks. I already requested them to resend it 2 weeks ago but they've been so fucking slow.