On the W-2 it should be Box 12 with Code J not Box 13.
A Form W-2 must be prepared even if all of the sick pay is nontaxable (see Box 12 below). All Forms W-2 must be given to the employees by January 31."
Whether the payments are taxable depends on how and when they are paid. If all or a portion is taxable, the taxable portion will be reported on your W-2 that is issued by your employer, or reported on a Form W-2 issued by the insurer.
If you receive a W-2 for a third party sick pay, with no amount in box 1 for wages and the income is reported in box 12 with code of J: Non-taxable sick pay is not subject to taxation. It does not need to be reported on your income taxes. Your employer was required to generate a W2 with the figure, which is why you received it. So basically you do not need to file this return, per IRS.
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