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New Member
posted Aug 22, 2024 10:11:53 AM

I had sick pay included in my wages why was i taxed at a higher rate?

0 2 4424
2 Replies
Level 15
Aug 22, 2024 10:27:34 AM

Where are you seeing on the W-2 that the sick pay was taxed at a higher rate?

 

If your employer paid for the policy then the amount would be included in box 1 of the W-2 and taxed at the same rate as the rest of your wages.

 

See this TurboTax support FAQ for sick pay - https://ttlc.intuit.com/turbotax-support/en-us/help-article/income/third-party-sick-pay-taxable/L1AEnNiyA_US_en_US?uid=m05jyusy

Level 15
Aug 22, 2024 11:09:40 AM

If this is a lump sum income, it is often withheld at a higher rate due to IRS rules on lump sum payments.  Your actual income tax due is calculated on your tax return at the end of the year, based on all your income and deductions, and if you were over-withheld, the difference comes back to you as a tax refund.