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Level 1
June 3, 2019
Question

Will I receive a W2 for maternity disability payments

  • June 3, 2019
  • 2 replies
  • 0 views
I received a W2 for Paid Family Leave will I receive a W2 for maternity disability as well

2 replies

June 3, 2019

Probably. Third-party sick pay is an insurance disability benefit (payment) that provides benefits to employees in place of lost wages due to absences caused by an illness, maternity leave or non-work related injury. These payments are made to covered employees under a plan that is set up for participating employers. These payments typically are a percent of the employee’s gross pay and commonly referred to as short-term disability.

  • If the employer pays the entire insurance premium, then the sick pay payments received are 100% taxable to the employee.
  • If the employer pays a portion of the premium and the employee pays the balance with after-tax dollars, then the sick pay payments are taxable in the same proportion as the percentage of the premium paid by the employer.
  • If the employer pays nothing and the employee pays the entire premium with pre-tax dollars, then the sick pay payments received are 100% taxable to the employee.
  • If the employer pays nothing and the employee pays the entire premium with after-tax dollars, then the sick pay payments received are not taxable to the employee.

Non-taxable sick pay is not subject to taxation because the employee contributed completely to the sick pay plan. It does not need to be reported on your income taxes (and is not shown in boxes 1, 3, and 5 of the W-2). 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.

"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." http://www.irs.gov/publications/p15a/ar02.html#en_US_2014_publink1000169582.

J—Nontaxable sick pay (information only, not included in boxes 1, 3, or 5

Level 2
February 23, 2021

Got PFL for maternity leave payment  and the amount is entered in Box 1 (third-party sick pay box checked). How do I enter it in TurboTax? Thank you

MaryM428
Level 11
February 24, 2021

Paid maternity leave is sometimes paid for by insurance and is not always taxable.  If it is taxable it will be reported on a W2 form and you will enter it in TurboTax in Federal, Wages and Income, Wages and Slaries, Form W2.  Check with your employer to see if the leave is taxable and if a W2 will be issued for it.

 

Level 2
February 24, 2021

Thank you! Your answer explains it and is very helpful in my case. Will proceed with adding it in TurboTax as explained.