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I just received a notice from California tax board that says I owe state tax on the deduction I claimed in 2017 for paid family leave. This was filed through turbotax so I assumed it was accurate. I also researched online and everywhere says PFL benefits are taxable only at the federal level. So what am I missing?

Update: below are quotes from EDD website. Could it be that this rule was different before 2018?

Why are my Paid Family Leave benefits included as taxable compensation? Paid Family Leave (PFL) benefits are considered a type of unemployment compensation and are taxable. Your PFL benefits are taxable and reportable on your federal return only.

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  • I would at least get the tax statements from California and Federal for that year to see what numbers are in their respective systems.
    – Morrison Chang
    Aug 10, 2021 at 16:53
  • On the notice you got from the FTB, what was the Notice number? It will probably start with "FTB" and have some numbers after that.
    – Ben Miller
    Aug 10, 2021 at 19:01
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    @BenMiller-RememberMonica There is a footnote that says "FTB 5830G ENS (REV 12-2017)".
    – John Jiang
    Aug 10, 2021 at 19:49
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    What do you mean by "claimed deduction"? It's not something you generally deduct, it's just not reported as income. Could it be that you deducted the amounts from your taxable income when they were never actually included?
    – littleadv
    Jan 8, 2022 at 3:54

1 Answer 1

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From an official California site:

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From the same site -

enter image description here

EDIT: There should be no California tax due. I misread the page the first time. Sorry

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    Doesn't that last sentence say it is not subject to state tax?
    – Ben Voigt
    Aug 10, 2021 at 15:48
  • @BenVoigt Not from the US, so don't know the ins-and-outs, but my reading of "not reportable by California" is that the Californian tax people won't report a PFL to the IRS... i.e. that it's still up to the recipient of PFL to do so. Of course, I could be completely wrong!
    – TripeHound
    Aug 10, 2021 at 17:21
  • Thank you both. Updated. Need new glasses.
    – JTP - Apologise to Monica ♦
    Aug 10, 2021 at 17:40
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    @TripeHound: I agree that it is completely unclear. But your straight-forward interpretation that "California will not report to the federal taxing authority" conflicts with the first clause of the sentence "For state taxes" or the previous sentence "You will receive a 1099-G" which assuredly is reported to the IRS. The next-most straightforward interpretation is that California does not include PFL as part of taxable income.
    – Ben Voigt
    Aug 10, 2021 at 18:33
  • @JTP-ApologisetoMonica Is PFL paid by the employer also state tax-free in California? In my situation, it was probably split half and half. But certainly the tax notice made no distinction between them.
    – John Jiang
    Aug 10, 2021 at 23:51

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