Tax year 2015, client recently received Notice of Proposed Assessment from CA adding back the paid family leave (pfl) received by Prudential Insurance. The pfl reported on a W-2 had been backed out of CA taxable income through the software manually. Had pfl been reported on 1099G it would have been backed out of income automatically.
The main question is if reported on a W-2 does that imply its taxable to CA? Or is taxable to CA if the employee did not pay the premiums for the policy? Am I overlooking something? Any/all thoughts are appreciated, thank you in advance.
The state mandated PFL benefits paid are reported by the state on a 1099-G. In your case the PDF was voluntary? So possibly that’s why it was reported on W2 and taxed for all types of taxes-SS, medicare, and income.