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Wendy Reed
Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3346
Experience:  15+ years tax preparation and tax advice.
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do I need to pay taxes on third party sick pay

Resolved Question:

I was off on medical leave last year and recieved sick pay. on my w2 it is on there as third party sick pay and I needed to know if I will have to pay taxes.
Submitted: 10 years ago.
Category: Tax
Expert:  Wendy Reed replied 10 years ago.
The part of third party sick pay coded as J in Box 12 of your W2 that is not taxable is not included in your federal wages. If any of the benefits received are taxable, they should be included in Box 1 of your W2, as federal wages.
Customer: replied 10 years ago.
Do I even need to take the w-2 that it is on with me to get my taxes done?
Customer: replied 10 years ago.
actually it is in box 11 not 12 on the form. the amount is on the top like regular wages and the box 11 just has a check
Expert:  Wendy Reed replied 10 years ago.
I see, I did not realize that you were getting a separate W2 altogerther. I'm not sure why it is in box 11, but for the purposes of third pary (usually an insurance company) sick pay, part, all, or none of it may be taxable---it depends upon if the employee made any contributions. If amounts are included in box 1 of the W2, those amounts are taxable. Usually federal tax is not withheld on third party sick pay unless the employee requests it. You definitely need to take the W2 with you when you get your taxes done.
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