A third party, who pays sick payments to an employee, such as an insurance company,
or a state agency that administers a state program, is responsible for:
withholding the employee's share of Federal Insurance Contributions Act (FICA) taxes;
depositing the amounts with the IRS; and
notifying the actual employer (the last employer of record) of the amount of sick
pay made to the employee.
Third-party payers and employers should consult IRS regulations for the rules on reporting
sick pay (based on sections 5 USC § 6302 and 26 USC § 6051 of the Internal Revenue Code).