Notice that the referenced citation first begins with "Sick pay and sick leave are taxable compensation when representing your regular wages." and then goes on to explain "Payments, not representing regular wages, . . ." which seems to include that such non-wage substitution payments made either by the employer and/or a third-party, are not taxable by PA.
Did your employer include the third-party payments in your W-2's box 16?
Was PA income tax withheld from that entire value in Box 16?
Generally, third-party sick/short-term disability payments received in substitution for regular wages remain taxable by a state with an income tax.
