Form W-4S is the IRS form you use to ask a third-party sick pay payer, usually a disability insurance company, to withhold federal income tax from your sick pay checks. Without it, no federal income tax comes out of those payments, and you can end up owing a large sum when you file. The form asks for a flat dollar amount to withhold from each payment, and you send it to the payer, not to the IRS.
When the Form Applies
Form W-4S is for sick pay that comes from someone other than your employer. That is typically an insurance company your employer contracted with to pay short-term or long-term disability benefits. If your employer pays you directly while you are out sick, taxes are already withheld from those payments through your regular Form W-4, and W-4S has no role.
The IRS defines sick pay here as money you receive under an employer-sponsored plan that replaces your regular wages while you are temporarily away from work due to sickness or injury. A few situations fall outside the form:
- Workers’ compensation benefits are generally not subject to federal income tax, so W-4S does not apply.
- If you personally paid the plan premiums with after-tax dollars, the benefits are not taxable and you do not need the form.
- If your employer paid the premiums, or paid part of them, the benefits (or the portion tied to the employer’s contribution) are taxable, and withholding through W-4S is worth considering.
How to Fill It Out
You can download Form W-4S from the IRS website or request it from your sick pay payer. The form is short. You enter your name, address, Social Security number, and the dollar amount you want withheld from each payment, then sign it.
Figuring the Amount
The form includes a worksheet that walks you through your expected annual income, adjustments, deductions, and credits so you can arrive at a per-payment withholding figure. The worksheet is for your records; you do not submit it. If you have other income during the year, or a working spouse, factor those in so your total withholding across every source covers your full tax bill.
Aim carefully. Too little withholding leaves you with a lump sum owed in April and possible penalties. Too much means you have handed the government an interest-free loan while living on reduced income.
The Dollar Rules
Your requested amount has to fit within these limits:
- Whole dollars only. You can request $35 per payment, not $34.50.
- At least $4 per day, $20 per week, or $88 per month, depending on your payroll period.
- Your withholding cannot reduce a single sick pay check below $10. If it would, the payer will not withhold anything from that payment.
Where to Send It
Give the completed, signed form to the third-party payer of your sick pay. Do not send it to the IRS. The payer decides whether to accept a mailed paper form or an electronic submission through its portal. Withholding begins on payments made more than seven days after the payer receives your form, though a payer may start sooner.
Changing or Stopping Withholding
A W-4S stays in effect until you change or cancel it. To adjust the amount, submit a new form with the updated figure. To stop withholding, fill out a new form, write “Revoked” in the dollar amount box, sign it, and send it to the payer. A written notice works too. The change takes effect on payments made more than seven days after the payer receives it.
What the Form Does Not Cover
W-4S handles federal income tax only. Social Security and Medicare taxes on third-party sick pay follow separate rules that do not depend on any form you file. During the first six calendar months after the last month you worked, sick pay is subject to Social Security tax (6.2% up to the $184,500 wage base for 2026) and Medicare tax (1.45%, plus the 0.9% additional Medicare tax if applicable). After that window, sick pay is exempt from both. Going back to work, even for one day, resets the six-month clock.
At year end, you will get a Form W-2 showing the sick pay and any federal income tax withheld under your W-4S. The “Third-party sick pay” box in Box 13 will be checked.
Estimated Payments as an Alternative
If you would rather not use W-4S, or want to supplement it, you can make quarterly estimated tax payments with Form 1040-ES. The deadlines are April 15, June 15, September 15, and January 15 of the following year. Estimated payments give you more control, but you have to calculate the amount, track the dates, and send payments yourself. W-4S is simpler because the payer handles it automatically once your form is on file, which matters when you are managing a health situation on top of everything else.
Staying Out of Penalty Territory
Whichever method you use, the point is to pay enough during the year to avoid the IRS underpayment penalty. You are safe if any one of these is true:
- Your return shows you owe less than $1,000 after withholding and credits.
- Your withholding and estimated payments during the year covered at least 90% of what you ultimately owe.
- Your payments equaled or exceeded 100% of the total tax on your prior-year return. If your prior-year adjusted gross income exceeded $150,000 ($75,000 if married filing separately), the threshold rises to 110%.
The prior-year rule is the most useful one when your income is unpredictable. Look up what you paid in tax last year, set your W-4S withholding to hit that number across the year’s payments, and you will land inside the safe harbor no matter how the final liability comes out.