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ihatetheflu
New Member

Does third party sick pay qualify for earned income credit?

 
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AnthonyJ
New Member

Does third party sick pay qualify for earned income credit?

Please refer to the answer posted by SweetieJean (SuperUser) regarding this question.

https://ttlc.intuit.com/replies/5485818

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10 Replies
macuser_22
Level 15

Does third party sick pay qualify for earned income credit?

Is it reported in box 1 on a W-2?
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
AnthonyJ
New Member

Does third party sick pay qualify for earned income credit?

Please refer to the answer posted by SweetieJean (SuperUser) regarding this question.

https://ttlc.intuit.com/replies/5485818

rog3
New Member

Does third party sick pay qualify for earned income credit?

Third party sick pay not allowed by California for EIC
macuser_22
Level 15

Does third party sick pay qualify for earned income credit?

@rog3 - CA  follows the Federal.   I see nothing in  CA tax code that excludes 3rd party sick pay that is reported in box 1 on a W-2.    Do you have a cite?
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
SweetieJean
Level 15

Does third party sick pay qualify for earned income credit?

Eligible sources of earned income from:
W-2 wages.
Self-employment
Salaries, tips.
Other employee compensation subject to California withholding.
Note: The 2017 tax year is the first time self-employment income can be used to qualify for Cal EITC.
<a rel="nofollow" target="_blank" href="https://www.ftb.ca.gov/individuals/faq/net/900.shtml">https://www.ftb.ca.gov/individuals/faq/net/900...>
Third Party Sick Pay is typically reported on a W-2.  Perhaps OP is thinking of CA Paid Family Leave that is reported on a 1099-G?
rog3
New Member

Does third party sick pay qualify for earned income credit?

I do not have cite. FTB letter states "We disallowed your EIC because you did not have earned income (code: CA)" However CA uses fed AGI which includes W-2 third party pay of 8,200. However taxpayer has no taxable income and that may be the issue. Concerned that Turbotax program may need to be revised for CA
SweetieJean
Level 15

Does third party sick pay qualify for earned income credit?

Per CA, gather:
Proof of your earned income (W-2, W-2C, 1099 forms) and final year-to-date pay stub(s).
Contact and submit documents to the Filing Compliance Bureau:
Phone: 916.845.7088
Fax: 916.845.9351
Mail: Franchise Tax Board MS 151
PO Box 1468
Sacramento, CA 95812-1462
macuser_22
Level 15

Does third party sick pay qualify for earned income credit?

As far as I know CA only excludes sick pay paid under FICA or the Rail Road Employees act.   3rd party sick pay that the IRS counts as earned income is also counted as earned income in CA.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
SweetieJean
Level 15

Does third party sick pay qualify for earned income credit?

Did the W-2 have an amount in Box 16 (state wages)?
rog3
New Member

Does third party sick pay qualify for earned income credit?

Yes the W-2 includes third party sick pay in Box 16 state wages. All W-2  wages is third party sick pay
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