1099-MISC for Colorado FAMLI Parental Leave

littlemogs
littlemogs Member Posts: 1 Newcomer
in State Filing

Because parental leave at my company was managed by a claims administrator instead of the state, I was issued a 1099-MISC instead of a 1099-G. FAMLI leave in Colorado is not taxable at the state level. When I enter the 1099-MISC into FreeTaxUSA, it forces me to select it as income, choosing between Other Income (Form 1040), Business Income (Schedule C), Farm Income (Schedule F), or Farm Rental Income (Form 4835). I cannot skip this step. Selecting "Other Income" suddenly takes me from receiving a refund from CO to owing the state.

Is there a way to enter a 1099-MISC in FreeTaxUSA that will process it properly for Colorado FAMLI leave (as non-taxable by state)?

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Answers

  • KristineS
    KristineS FreeTaxUSA Agent Posts: 239

    Hi littlemogs,

    Paid Family Leave (PFL) is reported on Form 1099-G. It's possible the income on Form 1099-MISC is not PFL, and you would need to check with the company claims administrator for those details.

    You are correct FAMLI leave benefits from CO is not taxable to the state. The Form 104 Booklet instructions states to subtract this amount on line 22 of the state return for the income reported on the federal return (Schedule 1, Line 7).

    Form 1099-G is automatically place on line 7. Form 1099-MISC is not as you have noted.

    An option to reporting this income is to report it as other income. Follow this menu path: Income > Uncommon Income > Other Income. Scroll down to the bottom and answer YES to the prompt "Did you receive any other miscellaneous income during 2024?" and continue forward.

    You'll be prompted in the state section accordingly for FAMLI.

  • Colorado_Resident
    Colorado_Resident Member Posts: 1 Newcomer

    I have the exact some situation. In Colorado, FAMLI benefit paid by Colorado through a claims administrator. I paid for tax support from FreeTaxUSA and asked my support contact if he thought I incorrectly received a 1099-MISC instead of 1099-G and he did think that was the case based on information available on Colorado's FAMLI leave site, but didn't seem 100% sure.

    Has anyone had success getting the claims administrator to issue a corrected 1099-G from a 1099-MISC? If so, what approach did you take?

    Reading some articles online, it appears FAMLI paid benefit is taxed as benefit income, which only 50% of the income is taxable, so inputting it as benefit income vs Misc income can make a big difference on Federal taxes owed. So, very curious how others are handling this.

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