third party sick pay on 1099 MISC

[JeffCPA]

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. 

[IRonMaN]

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.

[JeffCPA]

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]

@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.

[JeffCPA]

Thank you PA Tax.   I think your comments are spot on.  third party sick pay is, as far as I know, always reported on a W-2, and most definitely is not taxable at the PA level.  I am familiar with the PA Dept of Revenue Q and A forum.   I will take a look and see what I can find. 

[Camp1040]

I have seen that type of payment from employers in NYS. Employees are required to pay into the FMLA, and when they use the FMLA  program they are issued a 1099-Misc, the plan covers about 65% of takehome pay but no FICA/Medicare withheld from third party, so employee is almost whole on take home pay.

I have been filing just as reported on other income.

Edit. Insurance company issued the 1099-Misc.

[JeffCPA]

Thank you camp1040.   In my quick googling of things I saw an article about family medical leave act payments being reported on a 1099 MISC as other income as well.    Thanks again. 

[PATAX]

You're welcome Jeff. Maybe accountant man or others will be coming on to the Forum soon and can help us.