The Essentials for Third Party Sick Pay in 2023: What Payroll Must Know to Tax and Report Correctly

Vicki M. Lambert

Vicki M. Lambert

Vicki M. Lambert, CPP, is President and Academic Director of The Payroll Advisor™, a firm specializing in payroll education and training. The company offers a payroll news service which keeps payroll professionals up to date on the latest rules and regulations. With nearly 40 years of hands-on experience in all facets of payroll functions...
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Vicki M. Lambert

Third party sick pay is a common benefit offered by many employers nationwide.  But handling it in the payroll department can be a very difficult challenge. There are many issues that must be clarified in order to determine the taxation and reporting requirements under the Internal Revenue Code.  For example, is the insurance company being used the employer’s agent or not the employer’s agent? Who is depositing the FICA taxes deducted from the employee’s payment and who is depositing the matching employer FICA taxes? Is the payment even subject to FICA taxes?  

Webinar Objectives

This webinar discusses the proper taxation and reporting of the fringe benefit known as third party sick pay.  It discusses what is and is not third party sick pay, how the taxation is affected by the status of the provider (is or is not the employer’s agent), when this type of payment is taxable and/or reportable and who is responsible for this taxation and reporting.

Webinar Highlights

  • What is third party sick pay
  • When is the third party not the employer’s agent and when are they
  • How does the status of the employer’s agent affect the taxation and reporting of third party sick pay
  • When is third party sick pay taxable for income tax
  • When is third party sick pay taxable for FICA and FUTA
  • When is third party sick pay non taxable
  • Who reports the payments for third party sick pay for such forms as the 941 and W-2
  • The latest on the new IRS Third Party Sick Pay form
  • What happens to the taxation if the employee pays a portion of the premium

Who Should Attend

  • Payroll professionals
  • Human Resources
  • Accounting Personnel
  • Business Owners
  • Lawmakers
  • Attorneys
  • Any individual or entity that must deal with the complexities and requirements of taxing and reporting third party sick pay for his or her employer
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IRS CPE Credits: 1 Tax hour

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