According to this State of California source payments made by third parties are fully taxable to an individual. These payments are also known as short-term disability payments. There are exceptions where some payment are not considered third party pay.
- Payments made by a third party when the employee has paid the premiums.
- Sick pay which is made after the first six calendar months following the last calendar month in which the employee performed services for the employer.
- Payments received under a workers’ compensation law and SDI payments.
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