2022 Year-end Tax Reporting - The Standard

2023 Year-end Tax Reporting

of Disability Income Benefits

S TA N D A R D

I N S U R A N C E

C O M PA N Y

December 2023

To:

Our Valued Policyholders and Plan Sponsors

Re:

Reporting 2023 Sick Pay Benefits

Standard Insurance Company is pleased to provide you with this booklet to help

familiarize you with your third party sick pay tax reporting responsibilities prior

to the annual tax reporting period.

Valuable information you will find in this booklet includes:

? A summary of reporting responsibilities for both you and The Standard

? Sample Disability Income Reports for Long Term Disability (LTD), Short

Term Disability (STD) and Statutory Disability Insurance (SDI) benefits and

a description of the information reported on these benefits

? A sample Form W-2 Wage and Tax Statement along with basic instructions

for completing the tax statement

? A sample Form W-3 Transmittal of Wage and Tax Statements

? Common questions and answers about the taxation of sick pay benefits

As a reminder, we prepare a Form W-2 that shows The Standard¡¯s name and

Employer Identification Number for the following:

? All LTD sick pay benefits

? All STD and SDI sick pay benefits paid under STD and/or SDI policies

that have an active tax reporting service agreement

If you have any questions about the contents of this booklet, please contact our

office at 800-525-3973. Our staff is available to answer your questions Monday

through Friday, from 6:00 a.m. to 5:00 p.m. Pacific Time.

2023 Year-end Tax Reporting

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Tax Reporting Responsibilities

Internal Revenue Code Section 6051(f) requires insurers to provide information

to policyholders and plan sponsors to allow them to report on sick pay benefits

paid to their employees. This includes the amount of disability benefits paid and

the amount of taxes withheld from those benefits during the previous calendar

year. It applies to benefits paid under both insured group policies and self-funded

employer-paid plans administered through Administrative Services Only (ASO)

agreements. We refer to these benefits as ¡°sick pay¡± in this booklet.

Policyholder/Plan Sponsor Responsibilities

You are responsible for the following unless you have an approved tax reporting

service agreement with The Standard for 2023:

? Prepare and provide Form W-2 Wage and Tax Statements to employees for

STD or SDI sick pay benefits received from The Standard in 2023.

? Pay the employer share of Social Security and Medicare taxes on STD and

SDI benefits paid to your employees by The Standard in 2023.

? Report the Social Security and Medicare taxes withheld and the taxable

amount of disability sick pay benefits on your Form 941 Employer¡¯s

Quarterly Federal Tax Return.

In addition, you are always responsible for paying and reporting federal and state

unemployment taxes, such as FUTA and SUTA, and any other miscellaneous payroll

taxes due on LTD, STD and SDI benefits.

Do not prepare a Form W-2 for any employee who received LTD sick pay

benefits from The Standard in 2023 nor include this information in your

quarterly Form 941 returns.

If you mistakenly prepare a Form W-2 for sick pay benefits for an employee for

whom The Standard will prepare a Form W-2, you will need to amend your tax

reports to prevent double reporting of benefits to the Internal Revenue Service.

Please contact your tax consultant for further information or advice for your

specific situation.

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Standard Insurance Company

Standard Insurance Company Responsibilities

As a service to our customers, The Standard:

? Provides the Disability Income Report with information you need to prepare a

Form W-2 for each employee, including employee name, address, Social Security

number, taxable percentage and total disability benefits paid and taxes withheld.

? Pays the employer¡¯s share of Social Security and Medicare taxes on LTD sick pay

benefits to your employees.

? Reports LTD sick pay benefits on our quarterly Form 941 returns.

? Pays the employer¡¯s share of Social Security and Medicare taxes on STD

and SDI sick pay benefits if you have an approved tax reporting service

agreement in effect with The Standard for 2023.

? Prepares and provides a Form W-2 for each employee who received LTD

sick pay benefits from The Standard in 2023.

? Reports STD and SDI sick pay benefits on our quarterly Form 941 returns if

you have had an approved tax reporting service agreement in effect with The

Standard for 2023.

? Prepares and provides a Form W-2 for each employee who received STD or

SDI sick pay benefits from The Standard if you have had an approved tax

reporting service agreement in effect with The Standard for 2023.

2023 Year-end Tax Reporting

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The Disability Income Report

The Disability Income Report identifies those individuals who received disability

sick pay benefits from The Standard in 2023. If The Standard will prepare a Form

W-2 for an employee listed on this report, you will find ¡°We Prepared W-2¡± under

the employee¡¯s name and address. You will need to prepare a Form W-2 for all other

employees listed on this report.

In addition to listing individuals who received sick pay during 2023, the Disability

Income Report will list summary data on individuals who participated in the

Benefit Contribution Deduction (BCD) service. Individuals are allowed to

participate in the BCD service if they are covered under an approved plan.

With the BCD service, individuals are allowed to use sick pay benefits to make

contributions to specific types of employee benefit contribution plans, either on

a pre-tax or post-tax basis. The Disability Income Report will only list summary

data on specific types of contributions to such benefit plans as retirement, health

savings and other pre-tax deductions.

If you have any questions about the Disability Income Report, please contact our

office at 800.525.3973. Our staff will be happy to answer your questions, Monday

through Friday, from 6:00 a.m. to 5:00 p.m. Pacific Time.

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Standard Insurance Company

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