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How to Report Third-Party Sick Pay to the IRS Step 1: Identify Whether Sick Pay Is Paid Under a Plan. To continue reading, register for free access now. ... Step 2: Identify the Entity That Pays the Sick Pay. ... Step 3: Apportion the Tax Responsibilities. ... Step 4: Decide Whether to File Form 8922. ... Step 5: Complete Form 8922.
\u27a2 \u201cThird-party sick pay\u201d (as defined in H.B. 5) is exempt from withholding and from taxation.
If the employer has contracts with more than one insurer or agent, the employer must file a separate Form 8922 for the wages and taxes related to each contract. supplying the name and EIN, and then file one Form 8922 for the wages and taxes related to the employers for which it isn't supplying the name and EIN. Box 1.
The third party reports any income tax withheld on the sick pay on the line on Form 941 for income tax withholding, reports the sick pay wages as taxable wages on Form 941 for social security tax purposes and Medicare tax purposes, and then makes a current quarter's adjustment for sick pay on the Form 941 to reflect ...
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