Taxes on Paid Leave Benefits

Submitted by Skywalker3221 t3_10ol0yx in Washington

This is the only guidance on the topic on the Washington paid leave site:

“Unfortunately, we don’t know whether the IRS will consider your Paid Leave benefits “taxable income.” We asked them to tell us so that we could provide customers with the right information, but they declined our request.

We understand that puts customers in a confusing situation and we’re sorry. But without specific guidance from the IRS, we can’t provide more information or detail to you. Our best and only recommendation is that you consult a tax professional for advice.”

Does anyone know how we are supposed to handle this?

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Comments

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doktorhladnjak t1_j6fswyk wrote

I saw that too. This is a huge fail for this program. How can its taxibility still not be known? It’s been around for years now

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zealNW t1_j6g2aiu wrote

It's taxable, just check the box that has them take out 10% or whatever it is when you apply.

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Skywalker3221 OP t1_j6g2jtv wrote

I’m past the application stage. I took leave last year.

Where did you locate the information about it being taxable income?

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zealNW t1_j6g6bdi wrote

I don't remember, might have been turbo tax telling me when I filed after taking paternity leave. I know I had to pay taxes on the income though.

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Skywalker3221 OP t1_j6g9sfj wrote

Ah gotcha. Well if you do remember something concrete definitely let us know I’m sure I’m not the only one with the question.

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TallGuyGreg13 t1_j6fi7yu wrote

Holy crap! I haven't ever considered this. I'm on leave right now, too. I used to be a financial advisor (used to be, so this is just my opinion), and I would definitely suggest withholding your own taxes with the intent to pay them out of pocket come tax time. The US Government usually takes any opportunity to tax your income, so I would expect this to be the same.

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Old_Principle1344 t1_j6ha3wv wrote

The FAQ I read said that they only expect family leave to be taxed not medical leave. They won’t even provide 1099-G for a medical leave even upon request, only family leave.

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jamaicanmecray-z t1_j6gq742 wrote

Hasn’t PFML been in effect since 2020? How do they not have an answer to this if people took leave and filed taxes in 2020 and 2021 already?

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mantalinimangoes t1_j6h23n0 wrote

You’ll get taxed when you file your taxes. I took my leave in 2020 and am about to take it again. Save a check or two.

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FFM_IsNotACrowd t1_j6m4kt4 wrote

It is taxed, I used PFML in WA in 2021 (state employee). You’ll get a separate tax form in addition to your W2. I forget the number. Could be 1099???

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Skywalker3221 OP t1_j6p0gb7 wrote

1099-g. They mention that and say that is provided, but won’t EXPLICITLY say you have to pay taxes or not.

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FFM_IsNotACrowd t1_j6p944t wrote

Maybe a tax attorney will chime in with insight 🤞🏻🤓 I already had enough going on, hence the need for leave, so I just took the easy (and possibly unnecessarily expensive) route. Good luck!

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