Chris wrote:

- quote -

(update) Ignore the last sentence about "like SDI" (more
below). However, the rest of the paragraph I'm hoping
someone will answer.

- quote -

(update) Some confusion on my part that I'd like to clarify.
The mixup wasn't that my wife filed for state SDI benefits,
but rather California's "paid family leave extension" which
is treated as unemployment income and thus taxable (by the
IRS, not CA). She was supposed to file for VPDI. If anyone
is taking on this question, please consider this info
instead going forward.

Thank you.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I have two related questions on CA VPDI benefits, but much
of the 2nd depends on the answer to the first. Here it
goes...

1. My wife paid into her company's VPDI instead of CA SDI.
She then received $775 in benefits. Since this is VPDI
instead of SDI paying this amount, is this amount taxable
both to the federal and CA governments? Is it like SDI in
which it's federally taxed, but not state taxed?

2. Actually, there's a bit more to #1 above. By a mixup in
her company's claim processing, she was told to file with
the state for the benefits. The $775 actually came from the
state and we received a 2004 1099-G from CA for this amount.
In February 2005, the state contacted both my wife and her
company about the mixup and the resolution was that her
company would reimburse the state for that amount, in
essence taking over the payout claim. Assuming there is a
*difference* between how SDI and VPDI benefits are taxed
(answer to #1 above), how would this be handled tax-wise,
considering:

a. The state paid the benefit in 2004.
b. The state is getting its money back in 2005.
c. The company is paying the benefit in 2005.

Would we:

d. Get the state to revoke its (or issue a revised) 2004
1099-G and get the equivalent 2004 VPDI benefits tax form,
or

e. Keep the 2004 state 1099-G, get a new one for 2005 that
revokes this amount and get a 2005 VPDI benefits tax form.

Regards,
Chris

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->