W-4S: Request for Federal Income Tax Withholding From Sick Pay

The Internal Revenue Service (IRS) Form W-4S, titled "Request for Federal Income Tax Withholding from Sick Pay," allows you to choose to have federal income tax withheld directly from your sick pay payments. This form is specifically for situations where a third-party payer, such as an insurance company, provides your sick leave benefits.

What is Sick Pay?

Sick pay refers to income you receive when you're unable to work due to illness or injury. It can come from various sources, including:

A. Employer-provided sick leave: Some employers offer paid sick leave as part of their benefits package.

B. Short-term disability insurance: This type of insurance provides income replacement when you're unable to work due to a covered illness or injury.

C. Accident and health insurance: Some accident and health insurance policies offer benefits for lost wages due to illness or injury.

Why Use Form W-4S?

By default, third-party payers typically do not withhold federal income tax from sick pay unless you instruct them otherwise. This means you receive the full amount upfront, but you might owe a significant tax bill come filing time. Using Form W-4S helps ensure a more even distribution of your tax burden throughout the year, avoiding a large tax payment at the end.

Who Needs Form W-4S?

You typically only need Form W-4S if your sick pay comes from a third-party payer like an insurance company or a government agency. This is because employers are already required to withhold federal income tax from your regular paycheck, including sick leave payments they provide.

Do I need to use Form W-4S with my employer?

No, employers are already required to withhold federal income tax from your regular wages, including sick pay. This form is only for sick leave payments from non-employer sources.

What happens if I don't use Form W-4S?

If you don't submit the form, the third-party payer generally won't withhold federal income tax from your sick pay. You'll be responsible for paying the taxes owed when you file your tax return.

How much should I request to be withheld?

There's no one-size-fits-all answer. Consider your overall tax situation, including other income sources and deductions. Consulting a tax professional can help determine the appropriate withholding amount.

Can I change the amount withheld on Form W-4S?

Yes, you can submit a new Form W-4S to the third-party payer at any time to adjust the withholding amount.

Where can I find Form W-4S?

You can download the latest version of Form W-4S attached below.