MN2V Posted March 25, 2008 Report Share Posted March 25, 2008 I am doing some volunteer work for local nursing home. A resident came to the home late in the year. His income for the year was all third party sick pay. He is 64 and otherwise qualifies for EIC. I can't find any reference that specifically includes or excludes the third party sick pay for EIC. I would appreciate some input on this. Thanks. Quote Link to comment Share on other sites More sharing options...
Eli Posted March 25, 2008 Report Share Posted March 25, 2008 I am doing some volunteer work for local nursing home. A resident came to the home late in the year. His income for the year was all third party sick pay. He is 64 and otherwise qualifies for EIC. I can't find any reference that specifically includes or excludes the third party sick pay for EIC. I would appreciate some input on this. Thanks. According to Pub 596 Pg 22 the following applies: Employee pay is earned income only if it is taxable. Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. But there is an exception for nontaxable combat pay, which you can choose to include in earned income Pub 596 Pg 11: Disability insurance payments. Payments you received from a disability insurance policy that you paid the premiums for are not earned income. It does not matter whether you have reached minimum retirement age. If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J.” Eli Quote Link to comment Share on other sites More sharing options...
MN2V Posted March 25, 2008 Author Report Share Posted March 25, 2008 It is not in box 12, it is in box 1 (not 3 or 5) and box 14 identifiedas third party sick pay. Quote Link to comment Share on other sites More sharing options...
MN2V Posted March 25, 2008 Author Report Share Posted March 25, 2008 actually box 14 states TAXABLE third party sick pay...that's why I am confused. Quote Link to comment Share on other sites More sharing options...
Eli Posted March 25, 2008 Report Share Posted March 25, 2008 actually box 14 states TAXABLE third party sick pay...that's why I am confused. oK, now I am too :-) Eli Quote Link to comment Share on other sites More sharing options...
mcb39 Posted March 25, 2008 Report Share Posted March 25, 2008 oK, now I am too :-) Eli Sick pay is taxable. Workmans Comp is not. For EIC purposes a taxpayers income is generally limitd to the amount included in taxable income. Sick pay and disability income prior to retirement age are taxed as wages. (Source: Quickfinders). I would say that it counts Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 25, 2008 Report Share Posted March 25, 2008 Taxable sick pay does qualify for EIC. Quote Link to comment Share on other sites More sharing options...
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