3rd Party sick pay

[Sara]

Client brother who passed away in 2004, received a W-2.

Box 1 38,0000
Box 13 3rd party sick pay is checked and in Box 12A the letter J is there with no amount.

I was going to call Aetna and investigate some more.

Do you file a return? I'm seeking some advice.

Thanks

[Eli]

It doesn't hurt....

to check. I believe 3rd party sick pay is non-taxable. I'm sure someone will chime in here if I'm mistaken.

Eli

[Jan]

A little rundown on sick-pay

Taxable
*Amounts paid by an employer
*Amounts paid by an insurer attributable to premiums paid by an employer and not included in employee’s income
*Sick pay prior to retirement age are taxed as wages. The payer must issue Form W-2 even if all benefits are nontaxable. Taxable benefits are reported in box 1. Nontaxable benefits are reported under Code “j” in box 12.

I think is your case it'a all taxable.

[jimmcg]

Ref Tax Book, page 3-17.