In 2020, I received sick pay from a short-term disability insurance plan through my employer, who pays the full premium (no cost sharing). I received a separate W-2 from the insurer but noticed that no Social Security or Medicare taxes were withheld. The full amount was reported as federal taxable wages in box 1, but SS/Medicare wages and withholdings show as 0 in their respective boxes. From my research, it seems that in my case for short-term disability payments for which my employer pays the full premium, FICA taxes should be withheld. I checked my normal employer W-2 and didn't see any FICA taxes beyond the normal 6.2% for SS and 1.45% for Medicare withheld either. Is this an error, or is this the proper way to handle my sick pay in my case?
