DENVER - Today, in a letter to IRS Commissioner Daniel Werfel, Governor Polis, joined fellow governors in urging the commissioner to provide guidance on the taxability of Family and Medical Leave Insurance (FAMLI) benefits, and also encouraged the IRS to prevent double taxation. The Governor was joined by Connecticut Governor Ned Lamont, Maryland Governor Wes Moore, Massachusetts Governor Maura Healey, Minnesota Governor Tim Walz, New Jersey Governor Phil Murphy, New York Governor Kathy Hochul, Oregon Governor Tina Kotek, and Washington Governor Jay Inslee.
“As states operating these programs, we urge the Internal Revenue Service to provide clarifying guidance in this area, specifically regarding the taxability of these benefits and premiums, and to prevent the risk of double taxation.” The Governors wrote. “The current absence of guidance from the IRS on the tax treatment of these programs creates a substantial risk of an unexpected and large tax liability for those who rely on these programs to take family leave, deal with a personal illness, or take care of vulnerable family members,” the Governors wrote.
Colorado’s FAMLI program is the result of the voter-approved Prop 118, which passed in November 2020. FAMLI benefits became available for workers on January 1 of this year.
Governor Polis has continually advocated to protect Coloradans from unnecessary taxation. In February 2023, Governor Polis urged the IRS to avoid taxing Coloradoan’s rightfully owed refunds. Coloradans seeking information about FAMLI, can learn more at famli.colorado.gov/.
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