Reminder Regarding Third Party Sick Pay

Wisconsin does not follow the federal provisions relating to payments of sick pay made by third parties (e.g., An insurance company). Wisconsin statutes provide that when a third party payor of sick pay makes payments directly to the employee and withholds Wisconsin income tax from those payments, the payor must report and remit the tax withheld from sick pay, not the employer. Therefore, for Wisconsin purposes, the payor of third party sick pay plans must issue a Wage and Tax Statement (federal Form W-2) directly to the individual who received the sick pay. This Wage and Tax Statement must report the amount of taxable sick pay, and the total amount of Wisconsin income tax withheld.

Page last updated March 5, 2010