third party sick pay on 1099 MISC

Forum|Forum|2 years ago
April 7, 2024
1 reply
21 views

Greetings. I am working on joint federal tax return. Husband and wife were both disabled in 2023. Wife received a W-2 from Unum Life Insurance Company reporting wages as third party sick pay. I know how to handled that.

However, both husband and wife, each separately received a 1099 MISC form from the same Unum Life Insurance Company reporting payments in Box 3, "other income". I have never seen anything like this for third party sick pay.

I am assuming I will simply be reporting on the Form 1040, on the schedule where all kinds of other income of various sorts gets reported, but seems odd to me, and I sam second guessing myself, and feeling like I am missing something. Any suggestions or input. Thanks very much.

Also, what about state income tax treatment. Taxpayers are residents of PA, and third party sick pay is not taxable in PA, but is that really what this represents. Thank you.

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IRonMaN

Level 15

Are you positive that the payments on the 1099 are really for third party sick pay? In any case, I would report it on the 1040 as it was reported as other income. As far as PA goes, maybe @PATAX has some insight. He can maybe pop in here once he and Heidi are done listening to their weekend polkas.

Slava Ukraini!

J

JeffCPAAuthor

Level 5

Good comments. I am not positive that these payments represent third party sick pay. I am extrapolating from the fact that the wife, who was disabled (as was husband) received a W-2 form from the same life insurance company reporting wages as third party sick pay on that W-2 of more than $19,370.

Wife also died in middle of year. I did some googling of other things about 1099 MISC and other income, and I am now thinking that the these payments represents possibly other forms of accrued sick pay/vacation days, and/or wages of some sort owed to the wife, after she died. But then also paid to husband.

Wife's 1099 MISC is for about $1300, and husband's 1099 MISC is for about $17,000. I am inclined to agree with your thinking that is simply other income that is taxable at the federal leve. And possibly when the polka's stop, the other person you reference will weigh in. Thanks for your help IronMan.

PATAX

Level 12

@JeffCPA @IRonMaN I agree with Iron Man's comments and yours Jeff, you have to find out what those payments on the 1099 miscellaneous forms are for. I can't remember ever seeing sick pay on a 1099 miscellaneous, I always remember seeing them on a W-2. There is a note that I made on March 10th in my important note files: "Third party sick pay/disability is not taxable income for PA and local (for third party sick pay reported on W2)". PA Department of Revenue has a question and answer forum, and you can see previous questions and the answers, I would go on that and see what you can find, maybe someone had a 1099 miscellaneous similar to this.

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