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New Member
posted May 31, 2019 5:45:24 PM

Is third party sick pay considered earn income, if received and reported on W-2 code J, for Earn Income Credit purpose if received before minimum retirement age?

Earn Income for EIC purpose

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1 Best answer
Level 15
May 31, 2019 5:45:25 PM

Third party sick pay paid by agents [i.e., insurance company] of the employer are treated as supplemental wage income (see Treasury Regulation 31.3402(g)).  Supplemental wage payments are considered to be earned income for purposes of the Earned Income Tax Credit (see Internal Revenue.Code Section 32(c)(2)(A)(i)).

3 Replies
Level 15
May 31, 2019 5:45:25 PM

Third party sick pay paid by agents [i.e., insurance company] of the employer are treated as supplemental wage income (see Treasury Regulation 31.3402(g)).  Supplemental wage payments are considered to be earned income for purposes of the Earned Income Tax Credit (see Internal Revenue.Code Section 32(c)(2)(A)(i)).

New Member
May 31, 2019 5:45:27 PM

Thank you. I am new at this. I looked on-line at the Reg and IRC you quoted and do not find the same wording. What am I doing wrong?

Level 15
May 31, 2019 5:45:30 PM

<a rel="nofollow" target="_blank" href="https://www.law.cornell.edu/cfr/text/26/31.3402%28g%29-1">https://www.law.cornell.edu/cfr/text/26/31.3402%28g%29-1</a>