Unemployment insurance and paid family leave. Is it taxable?

IRC Section §85 provides for the taxation of unemployment benefits and paid family leave (PFL). The law excluding up to $2400 in benefits was repealed. Good news is that California does not conform to IRC §85.

Unemployment benefits and paid family leave are no taxable for California taxation purposes. Paid family leave, administered by the California Employment Development Department, as the name implies provides for up to $728.00 for individuals who take time off to take care of a newborn or seriously ill family member.

On the individual tax return, unemployment and PFL benefits will be an adjustment on Schedule CA (subtraction), therefore, removing it from taxable income.

Here at G&S Accountancy, we represent taxpayers for the IRS, FTB and EDD for audits, collections and appeals. We serve clients in the Inland Empire and in particular, Rancho Cucamonga, Ontario, Fontana, Chino, Riverside, California and surrounding areas.