{"id":11893,"date":"2025-07-30T22:45:00","date_gmt":"2025-07-31T03:45:00","guid":{"rendered":"https:\/\/www.brightmine.com\/us\/?post_type=resources&p=11893"},"modified":"2026-03-23T04:08:06","modified_gmt":"2026-03-23T09:08:06","slug":"how-to-report-third-party-sick-pay-to-the-irs","status":"publish","type":"resources","link":"https:\/\/www.brightmine.com\/us\/resources\/hr-compliance\/employee-leaves\/how-to-report-third-party-sick-pay-to-the-irs\/","title":{"rendered":"How to Report Third-Party Sick Pay to the IRS"},"content":{"rendered":"\n
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by Alice Gilman<\/strong><\/p>\n<\/div>\n\n\n\n

When an employee receives sick pay \u2014 including long\u2011term or short\u2011term disability pay \u2014 from a third party such as an insurer or insurance company, the employer and the third\u2011party payer may both have obligations to withhold, deposit and report Social Security and Medicare (FICA) taxes on the amounts paid.<\/p>\n\n\n\n

Federal income tax withholding is mandatory or voluntary, depending on the payer. Although sick pay is taxable to the employee, and the employer must pay its matching share of FICA taxes, under special rules the employer and the third party may transfer liability between themselves for withholding, depositing and reporting the taxes attributable to the sick pay.<\/p>\n\n\n\n

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