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Third party sick pay what you need to know in 2021

  • AFSP
  • CMA
  • CPA (US)
  • EA
  • HRCI
  • Tax Preparer
  • SHRM
  • CTEC
Third party sick pay what you need to know in 2021

1 Credit


Subject Area


Webinar Qualifies For

1 CE credit of Federal Tax for Enrolled Agents ( IRS Approved : GEHNZ ) (Approval No. GEHNZ-T-00611-21-O)

1 CE credit of Federal Tax Subjects for California Tax Professionals (CTEC Approved - 6273) (Approval No. 6273-CE-0584)

1 CE credit of Annual Filing Season program (AFSP)( IRS Approved : GEHNZ )

1 CPE credit for Certified Management Accountants (CMA)

1 PDC credit for SHRM Certified Professionals (Approval No. 21-TMDZ7)

1 RCH credit for HRCI Certified Professionals (Approval No. 567032)

1 CE credit of Federal Tax for Maryland Tax Preparers (Approval No. GEHNZ-T-00611-21-O)

1 CE credit of Federal Tax for Oregon Tax Preparers (Approval No. GEHNZ-T-00611-21-O)

1 General Educational credit for Tax Professionals / Bookkeepers / Accountants

Course Description

Legislation is changing rapidly in regards to employers being required to provide employees with accrued sick time. In 2020 with the COVID-19 pandemic states and federal have updated legislation on paying sick pay. It began with city legislation and has now moved to states such as California that employers must comply with.  Employees who lose wages as a result of illness or a nonwork-related accident are eligible to receive disability payments, also known as third-party sick pay.

Most employers provide some degree of wage protection for employees who miss work Due to personal illness or injury. Sick pay paid directly by an employer generally is treated as ordinary wages, subject to withholding for federal employment taxes. FICA taxes, however, apply to such payments only for the first six months.

If sick pay is provided through a third party, such as an insurance company, income tax withholding does not apply unless requested by the employee. For purposes of FICA, the third-party payer of sick pay is considered the employer and is responsible for withholding, paying, depositing, and reporting taxes on sick payments unless this responsibility is transferred to the actual employer.

Any portion of sick pay paid by a third party that is attributable to the employee’s own premium contribution is not wages and is not subject to withholding. However, when premium contributions are made with pre-tax dollars under the employer’s cafeteria plan and deferred from taxation, then any sick pay paid by a third party to the employee is subject to FICA and FIT withholding.

Major Topics covered in this online CPE/CE webinar:

  • Up to date legislation and pending legislation in regards to mandated sick pay requirements on employers.
  • Who is responsible for tax withholding and reporting for third-party sick pay?
  • Details of states with disability funds 
  • How the tax is handled and claims are worked in regards to your third-party provider?
  • 2020 & 2021 federal requirements due to the Emergency paid sick leave act and the families’ first coronavirus response act.

Learning Objectives

  • To review different types of ways companies can choose to handle third party sick pay with their providers. 
  • To discuss State and City review of current legislation of sick accruals that must be provided to employees 
  • To determine W-2 reporting requirements for third party sick pay 
  • To determine what tax should be withheld and reported and by whom 
  • To describe how to handle waiting periods before disability starts 

Who Should Attend?

  • Accountant
  • Accounting Firm
  • Assistant Controllers
  • Business Owner
  • California Registered Tax Professional
  • CEO
  • Certified Public Accountant
  • CFO/Controller
  • Compliance Managers
  • Compliance Officers
  • CPA (Industry)
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • Enrolled Agent
  • Entrepreneurial Accountant
  • Entrepreneurial CPA
  • HR Professionals
  • Human Resources Manager
  • Maryland Tax Preparers
  • Oregon Tax Preparers
  • Tax Accountant (Industry)
  • Tax Attorney
  • Tax Director (Industry)
  • Tax Firm
  • Tax Managers
  • Tax Practitioners
  • Tax Professionals
  • Young CPA





The presenter started off very slowly in going over the requirements by state. Then, after the 1st polling question, sped up going through the states. However, when she got to the detailed general slides, she flew through these and didn't take time to try to point much out.