CA Unemployment AND Paid Family Leave Exclusion

In California, EDD pays Paid Family Leave for new parents. It's taxable (only to IRS, not to CA FTB) & 1099-G's same as Unemployment Box 1.

I have a married couple client that had a baby late 2019. In 2020, husband got UI $15K & PFL. W got PFL.

With today's update, Lacerte is excluding $10.2K of H's UI and all $3,577 of W's PFL. Any thoughts?

Is this acceptable (I don't think it's right, but I could be misinformed)?

If it's wrong, should I override to re-add the PFL back to Sch 1?

This topic has been closed for replies.

Best answer by TaxGuyBill

Yes, the taxable amount of the PFL is considered as Unemployment Compensation (Section 86 of the Federal Tax Code).

Level 15

Yes, the taxable amount of the PFL is considered as Unemployment Compensation (Section 86 of the Federal Tax Code).

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