Third Party Sick Pay: How to Tax & Report
Third party sick pay is offered by many employers, yet understanding how to handle the tax reporting obligations is a challenge and often confusing. There are many issues that must be clarified to determine the taxation and reporting requirements under the Internal Revenue Code and to comply.
Is the insurance company being used the employer’s agent? Who’s depositing the FICA taxes deducted from the employee’s payment, and who’s depositing the matching employer FICA taxes? Is the payment even subject to FICA taxes? We have the answers to these, and many more questions. Join our 60-minute event to learn:
- Proper taxation and reporting of third party sick pay
- What is and is not considered third party sick pay
- Which portions of sick pay are subject to tax withholding
- How taxation is affected by the status of the provider
- When it’s taxable and/or reportable and who handles it
The Ins & Outs of Third Party Sick Pay
- Defining and identifying third party sick pay
- When the third party isn’t the employer’s agent - and when are they
- How the status of the employer’s agent affects taxation and reporting
Third Party Taxation Requirements and Obligations
- When third party sick pay is taxable for income tax
- Understanding how third party sick pay is taxable for FICA and FUTA
- Conditions that make third party sick pay nontaxable
Reporting Do’s and Don’ts for Third Party Sick Pay
- Who reports payments for third party sick pay for Forms 941 and W-2?
- The latest on the new IRS Third Party Sick Pay form
- Taxation when the employee pays a portion of the premium
Live Question & Answer Session - Have your questions answered by the expert!
About the Speaker
Vicki M. Lambert, CPP, is President and Academic Director of The Payroll Advisor™, a firm specializing in payroll education and training.
- With over 35 years of hands-on experience in all facets of payroll functions as well as over 20 years as a trainer and author, Ms. Lambert has become the most sought-after and respected voice in the practice and management of payroll issues. She has conducted open market training seminars on payroll issues across the United States that have been attended by executives and professionals from some of the most prestigious firms in business today.
- A pioneer in electronic and online education, Ms. Lambert produces and presents payroll related audio seminars, webinars and webcasts for clients, APA chapters and business groups throughout the country. Ms. Lambert is an adjunct faculty member at Brandman University in Southern California and is the creator of and instructor for their Practical Payroll Online program, which is approved for recertification hours by the APA. She is also the instructor for the American Payroll Association’s “PayTrain” online program also offered by Brandman University.
We’ll give you the ins and outs of using third party sick pay and understanding the taxation and reporting requirements under the Internal Revenue Code.