Was your third-party sick pay policy paid for by yourself or by your employer?
If you paid for the policy, it isn’t taxable, even if you received a W-2. The income won’t need to be reported as long as you met the following requirements:
- Box 1 is $0 or blank
- Box 12 has code J
- Box 13 has the ‘Third-party sick pay’ box checked.
If your employer paid for the policy, then your sick pay is taxable. You will need to include the information from the W-2 on your return.
