The FAMLI Program recently received some new guidance from the Colorado Department of Revenue. Here is what you need to know:
- FAMLI premiums should be considered post-tax deductions that do not reduce an employee’s taxable income.
- Employers should report such deductions on IRS form W-2 in Box 14, and list “FAMLI” as the label.
- The FAMLI Division will issue IRS form 1099-G to each employee who receives FAMLI benefits, and the benefits paid will be reported in Box 1, which is labeled “unemployment compensation.” Per IRS instructions, this box is also used for governmental paid family leave programs.
FAMLI benefits are not subject to state income tax. However, the FAMLI Division cannot provide advice on federal taxation.
The FAMLI Division will issue a 1099-G form to claimants who receive benefits.