Tax Guidance from the CO Department of Revenue


Submitted by [user:field_first_name]
Hide Featured Image
true

Here is what you need to know about FAMLI and taxes 

  • 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 Act makes clear that benefits are not subject to state income tax. However, the FAMLI Division cannot provide advice on federal taxation.
  • Starting in 2025, claimants will have the option to have 10% of their benefit payments withheld and sent to the IRS for income taxes.
    • This will be a simple opt-in or opt-out option. Active claims won’t change but active claimants will have the option to change their tax withholding preferences in their Payments Dashboards within My FAMLI+.
    • If a claimant decides to have federal income taxes withheld, the funds will automatically be withheld from future payments, and FAMLI will remit the withheld amount on your behalf to the IRS. You can change your decision at any point for future payments, but you cannot retroactively collect funds that have previously been withheld.
  • The FAMLI Division will issue IRS form 1099-G to each employee who receives at least $10 in FAMLI benefits in a single tax year, 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. 
Show Post Date